Even if Suze Orman’s Name is on the Card Prepaid Debit Sucks

There is no reason to use the Suze Orman prepaid debit card when free checking is still available.

While free checking is becoming a little rarer, it hasn’t completely died yet. In fact, it’s possible to find plenty of free checking opportunities, if you just look around a little bit. Because of this, there is absolutely no reason to shell out for a prepaid debit card.

The Rise of Prepaid Debit Cards

Prepaid debit cards are on the rise as alternatives to checking accounts for the “unbanked” and they are touted as great financial teaching tools for teenagers. While both of these things might be true, it doesn’t mean that prepaid debit cards are best financial tools for the job.

Indeed, the “unbanked” might do well to consider credit unions and online banks that offer free checking options and easy to use debit cards that don’t come with monthly fees. On top of that, I’m not sure why a prepaid debit card is a better financial teaching tool than a regular debit card attached to a regular checking. I had a joint checking account with my mom at the age of 12; there are banks that will issue a 16-year-old a debit card on a joint checking account. Decline the standard overdraft “protection” and your teen has a regular debit card that will be rejected at point of sale transactions when there aren’t enough funds.

In spite of the fact that there are better options out there, prepaid debit cards are still rising in popularity. Fight back against the big banks and their fees! With a prepaid debit card that charges fees. Indeed, many prepaid debit cards have monthly fees, reload fees, check your balance fees, and other fees that make even an expensive checking account look cheap. I think prepaid debit cards are a bad idea to begin with, and the fact that celebrities plaster their faces all over them in an attempt to make money off those who can least afford to pay outrageous debit card fees only adds insult to injury.

But What About the Suze Orman Prepaid Debit Card?

Clearly, I’ve heard of Suze Orman. As a PF writer, I can scarcely avoid her. But I don’t pay much attention to her (or to Dave Ramsey, or to other gurus). Mainly because, as MJ DeMarco points out in The Millionaire Fastlane, most of the advice given is designed to help you maintain the status quo, and not actually get ahead. DeMarco lumps Suze Orman in that group, and, with the launch of the Approved Card, it’s not hard to see why. While the Approved Card is less crappy than other prepaid cards, it still sucks. Kevin at Thousanaire pretty much sums up the Approved Card:

I understand the fee structure on this card is less than some other prepaid cards available, but being better than horrendous doesn’t make you good; it just makes you better than horrendous.

Suze has been defending the card by saying that it’s better than other cards, and that it will lead a revolution in getting credit bureaus to start considering other items when figuring out your credit-worthiness. However, I’m skeptical. As part of CardHub’s evaluation of the Suze Orman debit card, her credit project has been lumped under “marketing fluff”:

It appears that this is just an anonymous information gathering program that allows TransUnion to determine whether prepaid card information should impact one’s credit score two years down the road. It therefore doesn’t do anything for cardholders.

On top of that, the access to TransUnion’s score and report is a bit of an overstatement. You can get access to your TransUnion information for free using Credit Karma (and access to your Experian info using Quizzle or Credit Sesame). So, if you don’t mind paying fees in an attempt to build your credit, you’re actually better off using a secured credit card – any prepaid debit card will do nothing to help you improve your credit history.

In a world where credit is increasingly important, being able to use alternative means of measuring creditworthiness is important, especially since many financially responsible people don’t like using credit cards. With credit reports and scores being used for a variety of purposes not related to getting loans, your credit is important. However, information about your ability to pay utility bills on time, or make rent payments, is more important than how you use a prepaid debit card. Anyway, I don’t think that Suze and her team a very good job of making sure consumers understand that the Approved Card does nothing to improve credit scores right now. Touting the TransUnion connection, and saying you’re sending information, is a nice marketing move, but it obscures the fact that this is not a credit product, and it’s useless, right now, for those looking to improve their credit.

Bottom Line

I have never liked prepaid debit cards. I think that they are sub-par replacements for free checking, and the Suze Orman Approved Card is no exception. However, the fact that a popular personal expert is touting this card is troubling. People trust Suze to point them to the best personal finance options and, unfortunately, prepaid debit cards just don’t cut it. There are much better products available, and it’s too bad that Suze isn’t using her influence to promote those products, rather than coming up with a prepaid debit card.

Written by Miranda Marquit

Miranda Marquit is a freelance writer and professional blogger, specializing in personal finance, small business, and investing topics. She writes for a number of financial web sites and blogs, and has been featured in numerous media. Read about life as a freelancer at MirandaMarquit.com and in her book Confessions of a Professional Blogger.

19 Responses to Even if Suze Orman’s Name is on the Card Prepaid Debit Sucks

  1. I never understood prepaid debit cards when there’s free checking accounts available at local banks and credit unions. PerkStreet has a great program, and so does Ally. She should’ve partnered with one of them. Especially since she bashed the Kardashians for their card.

    • Miranda Marquit says:

      No kidding. Plus, the PerkStreet program offers rewards. I keep meaning to look more into PerkStreet, but I haven’t yet. Anyway, you’re right. She could have looked around and partnered with any number of operations that provide truly innovative financial products that help people get the most out of their money.

    • She didn’t partner with anyone else because she is only in it for the money. This is why she is bashing all of the criticism. Each time she sees the criticism, she sees her dollar signs going down.

      I’ve lost all respect for her (not that I had much to begin with).

      I’d love to hear the response from other gurus like DR or David Bach (one of my favs).

      • Miranda Marquit says:

        I don’t know if we’re going to see a guru battle. ;) But it’s clear that Suze is a little afraid of the PF blogosphere, since she’s trying so hard to discredit it.

    • Sarah says:

      some people have no other option….DUH!

  2. Miranda Marquit says:

    LOL Pretty much. It’s not the worst card out there, not by a long shot, but it’s not the best, either. It just doesn’t such as much.

  3. Great write up Miranda! This debacle just keeps getting worse for Suze and I hope she pulls this card as I think this is getting ready to be a PR nightmare.

    • Miranda Marquit says:

      Thanks, Ginger! I hope she pulls the card as well. It would be great if someone so influential would use her powers for good.

      • Sarah says:

        some people need cards like that… you are so inconsiderate… you have no idea what I’ve gone through with Green Dot, hers cannot be any worse

  4. Did we ever calculate the total readership of the FinCon attendees? A million? More?
    I’m sure Suze doesn’t want every google search to turn up the negative rant she went on, but it’s probably too late.

  5. Jay Gould says:

    Suze Orman’s card is not a bad prepaid card, but it is nothing more than that either. It is not even the best prepaid card out there, as that distinction belongs to American Express’ prepaid card, which comes with no monthly fees at all.

    But what really bothers me is that Orman advertises her card almost like the solution to all of your financial problems, provided “you use it how I tell you to.” The thing is, if the “unbanked,” who constitute the vast majority of prepaid users, were always doing what they were told with their finances, they would never have been cut off of the banking system and come to rely on prepaid cards in the first place. http://blog.unibulmerchantservices.com/why-suze-ormans-prepaid-card-is-a-non-event

  6. End Wage Slavery says:

    What I don’t like about Suze Orman is that she is completely unrealistic on meta issues regardless of what she might have to say about individual finances.

    Her advice to people who don’t like slaving away for an exploitative wage? Become your own boss! Great idea! Why didn’t they think of that? Maybe because your average wage slave doesn’t have $5 left over after paying his bills for the month let alone enough money to start their own business? Maybe because a wage slave is highly unlikely to get approved for a small business loan?

    It’s like she sees what a massive pile of crap capitalism is, how it is more one-sided than a Moscow show trial in the ’30s and how it can’t survive without taking advantage of the vast majority of people but yet she still can’t bring herself to advocate raising the minimum wage to make it a living wage or something radical but necessary like transferring the ownership of businesses into the hands of their workers which would truly be the only option if we want to put an end to the exploitation of the average worker. She can’t bring herself to rip off the band-aid all at once and instead offers idiotic non-solutions that don’t bear any relation to everyday reality because offering such solutions doesn’t threaten the capitalist status quo. Get some guts Suze! Capitalism is a spectacular failure for the average person. You already realize it. Now come out and say it and offer some real solutions.

  7. Sarah says:

    gee, I wonder why some people aren’t using bank cards instead…. let’s see you inconsiderate snobs… have you ever heard of something showing up on chexsystems? This disables almost everyone on their list from being able to get a bank account.

    I am a hard working person who hit some hard times in this economy and because I was overdrawn I am not able to get a “free checking account”, “free debit card” or even a checking account at all…PERIOD!!!! Things happen morons! Do you honestly think that people are THAT stupid?

    Do you think if I had a fucking choice that I would choose between no fees or fees?
    The only reason I even have a pre paid card is because my employer only offers direct deposit.

    I have gone through 3 green dot cards due to errors made by the cust. service reps that caused my identity to not be verified.

    I couldn’t even pay my bills on time because of this.

    I have read many blogs that have said that there is a long road to disputing any negative report on chexsytems and some people who tried to fight chex, while only in the process of finding out what they owed whatever bank were hurt by asking about the debt as if it were the same as admitting they owed that debt.

    Now, this isn’t the same as my case.
    I was overdrawn (not by a lot), then they closed my account, then I was out of work. I kept putting it off because I was barely getting by with temp jobs and then years later I (for the first time) was not given an option of paper checks from my employer.

    I have been so behind on bills that I cannot afford to pay off those fees I own to my old bank and the amount I owe has more than TRIPLED.

    I read about people who paid off amounts owed to their banks and it not even helping their credit score. In fact, I’ve heard of cases where it has delayed in their credit report improving because even though paying off a debt owed should be commended, since it is a way of admitting that you had that debt, in many cases it has counted against that person and if they didn’t say anything and took no action, their credit report would have improved faster (even though they would have the con of not being able to open a bank account any more since nothing would have been settled). And now let’s go there. There have been many who paid off what they owed to their old bank, had a letter proving they did so (with the amount not even being that much) and other banks still would not approve them for even limited checking accounts.

    Now, riddle me this snobs, I was recently offered a limited checking account because of a negative history with another bank (which included only ONE negative incident in all of my banking history with that bank) in which I was allowed a debit card only and no checks. I was not allowed to cash personal checks. My only option was direct deposit of payroll checks. I had no overdraft option.

    Obviously, I was in no way a threat to this bank. (You’d have to be pretty fucking clever to be able to produce fake PAYROLL checks)…lol

    Yet, EVEN THOUGH I WAS HONEST ABOUT MY ONE NEGATIVE MARK ON CHEXSYSTEMS, and EVEN THOUGH THEY TOLD ME I WAS ELIGIBLE TO KEEP AN ACCOUNT WITH THEM (although it was limited which I was fine with), they closed the account less than a week later without even as much as giving me a phone call.

    I talked to the person who set up my account at BB&T, in person and I don’t believe she thought I was a threat. The decision was made based on information provided later by the consumer reporting agency, Early Warning Services.

    Gee, I wonder why?

    Wondering yet?

    I’ll tell you.

    The Federal Reserve (the FRB’s FCA office, actually) tells banks that each new account costs them $200. Banks make their money by lending out the money that is deposited into checking and savings accounts. Those who have been reported to ChexSystems do, as a group, carry lower balances in their accounts. By eliminating anyone with a ChexSystems record, banks are inexpensively able to weed out those who will cost more than they are worth. It has very little to do with your risk as an account holder. It has everything to do with the bank’s bottom line. Never mind the fact that millions of Americans are harmed in the process.

    Any way, what I had planned to say while you snobs are having a ridiculous debate about whether or not Suze Orman is capitalist or not was… since the beginning of my time using the pre-paid green dot card (which seems to be the only option I have for receiving my payroll checks through direct deposit)…I’ve had lots of problems. Their csr’s are always foreigners from Baguio, Philippines that rush through everything and repeat the same phrases over and over again and apologize for YOUR confusion even when you know exactly what’s going on.

    I’ve already had 3 different cards sent to me in 3 weeks due to all kinds of problems. Those guys are truly idiots! What’s worse is I’ve been to other blogs that have green dot horror stories of funds being withheld for long periods of time among other problems!

    So, snobs, please can someone tell me if Suze’s cards are any better? I don’t give a fuck about fees at this point. I just need to be able to trust that my payroll checks will be deposited on some card in an efficient matter! I have bills to pay! Please understand that some people have to take these desperate measures, a few dollars a month at this point is nothing and it’s my best option.

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