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Predictions for the Next Celebrity-Endorsed Prepaid Cards
By Ethan Geiling on 01/20/2012 @ 10:00 AM
Suze Orman, the financial advice guru, has been in the news recently for offering a branded prepaid card: The Approved Card.
Suze is not the only celebrity to endorse a prepaid card. Russell Simmons has the Rush Card and the Kardashian sisters briefly offered a Kardashian Kard, which was loaded with so many fees that it came under investigation and was quickly taken off the market.
Prepaid cards are not an inherently predatory product, and can actually be a great option for un- and underbanked consumers who are using alternative financial services, like expensive check cashing and payday loans. Prepaid cards are usually a little more expensive than a basic checking account. But underserved consumers often prefer prepaid cards to bank accounts because the fees on prepaid cards are more transparent, you can’t overdraft, and the cards are more accessible and convenient (you can often buy and load them in CVS, 7-11, and other retail locations). Some prepaid cards, like the Mango Card, even offer a linked high-yield savings account.
As far as prepaid cards go, Suze Orman’s card is relatively cheap. It costs $3 to purchase the card and there is a $3 monthly fee. Point-of-sale transactions at any retailer that accepts MasterCard are free. Perhaps the most unique feature of Orman’s card is that it will collect information about consumers’ spending habits and report it to TransUnion, one of the big three credit bureaus, although it’s not clear if and how much this data will affect credit scores. This is still a big innovation since many underserved consumers are often locked out of the mainstream credit system. See this great article from the blog Get Rich Slowly for more details about the credit aspects of the card.
All this recent media around celebrity-endorsed cards got me speculating about the next set of high-profile prepaid cards. Without further ado, here are my predictions for the next prepaid cards to hit the market:
“Swagger” – The Blue Ivy/Beyoncé Knowles/Jay-Z Family Prepaid Card
The world has been swooning since the birth of Beyoncé and Jay-Z’s new baby, Blue Ivy. With Jay-Z’s genes in the mix, it’s not clear how good-looking the baby will be when she grows up. Regardless, the entertainment world agrees that Blue Ivy will definitely have “swagger.”
The fine print: This prepaid card is targeted at high net worth children ages zero to two years old. It has a minimum balance requirement of $1 million and can only be used to purchase baby items priced over $10,000 (think diamond-encrusted baby bottles, gold-plated cribs, and ruby baby microphones).
“Gridlock” – The U.S. Congress Prepaid Card
Congress is quickly gaining a reputation for not getting anything done. But that doesn't mean they aren't going to offer a branded prepaid card to American consumers, most likely with a number of restrictions.
The fine print: Cardholders must get approval from Congress on any purchase over $25 – a process that takes between 10 and 36 weeks. The card also comes equipped with a fully-functional camera, in case you want to take any pictures, then text them to friends or post them on Twitter.
“Adultery” – The Herman Cain Prepaid Card
Even though Herman Cain dropped out of the Republican presidential nomination race, he has said he still intends to be involved in politics. Maybe this is a sign that a prepaid card is in his future?
The fine print: This card has great remittance features for cardholders interested in sending cash to “special friends” across the country. It also has no maximum balance limits, meaning it can be used to pay pricey lawyer fees and settlements on harassment cases. The card’s tagline is “Every kiss begins with Cain.”
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