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Why Suze Orman’s Approved Prepaid Debit Card is Terrible

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The Kardashians trying to make a quick buck by offering a debit card to their adoring fans makes sense. Even Gene Simmons offering an old school rock and roll signature debit card isn’t much of a story but when somebody like Suze Orman does it, that turns heads.

And it has. Some would say that Suze Orman is the queen of the personal finance gurus. She’s one of the few that is truly on the side of the consumer but her new debit card has some people questioning their Suzie love and maybe they should. Has Suzie gone rogue or is this card truly on the side of the consumer?

The Details

Companies who offer prepaid debit cards know that they’re going after the consumer that banks don’t want. Their credit is normally damaged to the point where a normal credit card isn’t an option and they don’t have enough money to keep in a bank account where they could use a debit card linked to their checking account. Of course there are other uses for these prepaid cards but the bulk of the market is subprime customers.

The reason that consumer advocates don’t like these prepaid cards is because they often come with high fees. A couple of bucks to reload the card, a few more dollars in monthly fees, charges to speak with a customer service representative and the ever-present ATM fee. Credit reporting agencies don’t consider debit card usage in to your credit score so having a prepaid card does nothing to help rebuild credit.

Orman’s card costs $3 to purchase along with a $3 monthly maintenance fee. Providing you stay in the Allpoint network and you make a minimum direct deposit of $20 per month, all ATM withdrawals are free. Your first call to customer service is free but after that you’re charged $2 per call. If you ask for cash back when making purchases, you’re charged an additional $2.

In addition, Orman has struck a deal with TransUnion that allows holders of her card to receive their credit report free of charge any time they request it which includes their TransUnion credit score. Although much less useful than the FICO score, this, along with her convincing TransUnion to begin tracking debit card activity, is a customer-friendly service.

The Verdict

You would think celebrities would learn from other people’s mistakes but apparently not. While this doesn’t seem to be something that will ruin Orman’s career, she isn’t scoring big points for the card. This article along with many others seem to illustrate the fact that consumer finance advocates who are generally anti-credit card shouldn’t push a debit card that is less cost effective than simply paying with cash.

We aren’t the first personal finance bloggers to complain about the card. I don’t know if she was the first but Briana at 20andengaged.com drew fire directly from Suze Orman herself for her critique. Phil also drew some heat for his less than stellar review of the card. My friend Jeremy at GenXFinance.com shared his thoughts as well. The consensus of us “idiots” was that it’s a terrible card.

In recent years, Suze Orman has taken some criticism for the many ways she’s found to capitalize on her fame. Her books, increasing television appearances, and now the debit card, in the eyes of some, have tarnished her reputation as somebody interested in giving unbiased advice.

But is that fair? Banks who issue prepaid debit cards have to charge fees because the people using them aren’t keeping enough money on deposit for the bank to make money on those funds. It would be unrealistic to think that a card like this would be fee free and it seems clear that Orman is in a can’t-win position as long as there are fees of any type associated with the card. This article does a great job illustrating why we would rather our celebrities endorse watches than debit cards and the less than enthusiastic response to the Suzie Card seems to illustrate that.

Maybe writing another book would have been a better idea? What do you think?

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19 Responses to “Why Suze Orman’s Approved Prepaid Debit Card is Terrible”

  1. sun says:

    > But is that fair?

    Is what fair? The criticism? Of course it is. Judge people by what they do not what they say. She’s done it and she deserves all the negative attention she’s gotten. This is going to cost her millions in brand damage. I’m sure she’s got a massive retirement… girlfriend, that’s all you’re gonna make a living on going forward.

  2. Des says:

    I am by NO MEANS a Suze Orman fan, and I think the whole twitter debacle was BS. However, I do think this card is a step in the right direction, if only on a larger scale. Right now, the only way to increase your credit score is through debt. The goal of this card is to feed information to TransUnion about how people use debit cards in an attempt to have TU try to find a way to incorporate debit card usage into their scoring model. If TransUnion begins using this information successfully in their scoring model, the other entities will follow suit. That is an important step in helping consumers take control of their score, and decoupling it from debt usage. Credit scores are used now for employment and insurance, and I think it is BS that you basically MUST have a Visa, Amex, or Mastercard (or take on other debt) to get a job or get the best insurance rates. I know this doesn’t fix that, but it is a step.

    • JoeTaxpayer says:

      Des – a pattern of making deposits and spending them is nothing that can turn into useful data to add to one’s credit. A secured credit card at least has an obligation to show you can write a check each month. I am being objective here. The credit aspect is a 18-24 month science project. If I were a betting man, it will come up with Transunion saying the data is meaningless.
      It’s a preloaded cash card, with some ability to pull your score. Is that worth $3/mo?

  3. Jason says:

    When is enough, enough? To cash in the fame and goodwill generated by years of helping people with personal finance by tying your name to a product that wouldn’t realistically be endorsed by anybody with a concern for people’s money problems seems like giving up to me. Maybe Suze is bored after so long, or maybe she’s had it with trying to help people only to have them continue to call and ask, “Can I buy a Monster Truck?”. It’s only my opinion but I don’t personally believe that she thinks this is a product that helps lower income users.

  4. Texas Wahoo says:

    Is this card supposed to be bad compared to other prepaid debit cards, or do people just not like prepaid debit cards in general?

    If it’s the latter, what should people without a bank account use when they cannot use cash?

  5. I started getting suspicious of her when she started constantly tweeting about gold. It became obvious very quickly she was getting paid to do it.

    Nothing wrong with taking money for endorsements but I wonder what her actual personal stance is on investing in gold.

    I didn’t see any disclosures anywhere about her getting paid to tweet.

  6. govenar says:

    “don’t have enough money to keep in a bank account”, but have enough money to load onto a prepaid card? I don’t think that makes sense. Though maybe there’s people who can’t get a bank account because they’re illegal immigrants, or wrote too many bad checks in the past.
    One use of prepaid cards that makes some sense to me is for parents to give to their kids, and then if the kid needs money quickly the parent can add money to the card.
    Other than that they seem pretty useless.

    • Bruce says:

      “can’t get a bank account because they’re illegal immigrants, or wrote too many bad checks” They seem useless to you obviously.
      Sort of the problem out there.

  7. zapeta says:

    The worst part was her reaction to everyone that called her out. Way to burn all the credibility that you’ve accumulated over the years in one day.

    • Shirley says:

      I agree with you and I feel like she really blew it on this one. Had she said something like “I’m sorry you feel that way, but here’s why I think….”, it would not have generated the harsh feelings. Her sorta-kinda apology/excuse for her actions didn’t really help matters much.

  8. Bruce says:

    People kill Me!! They want someone to do something and judging from studying her stated goals with this crud it seems better than the status quo and pointed in the right direction. I cant see why the incentive is not seen as worth throwing little dollars atcompared to all the crap deals out there. Seriously.

  9. Common says:

    This new card is only an attempt to help consumers do better in a credit addicted world, but this only trims the leaves of the tree of a problem.
    SOLUTION:
    Make everything free. Everyone would benifit from truly better products without greedy corporate tricks. Let everyone choose what they want to do, then educate them to the fullest. Putting aside greed for a moment, If all of our needs were financially automatically satisfied, would you do a job that you liked for 4-6 hours a day for free?
    Suze Orman’s card is a tiny attempt to make things for the consumer better, but it is doomed to fail because of selfish corporate greed.
    One day in the future, we’ll look back to these times and say; They were so greedy as individuals, that they held the whole human race down. They had a bucket full of crabs selfish mentality.
    Suze Orman is just a crab that is trying to help other crabs out of the bucket. She can’t do it alone, but bless her heart for trying.

  10. What upsets me more than her reaction to bloggers is that fact that she is deceiving consumers. TransUnion will be watching everyone’s purchasing patterns, for sure. She glosses over the fact that it MIGHT lead to influence on credit scores. I think most of us would agree that it simply isn’t going to happen. If I use a debit card to buy gas every week, I am not proving my credit worthiness.

  11. Eddie says:

    If some miracle occurs and the debit card information does hit the credit reports, it will almost certainly be as a negative.

  12. Strebkr says:

    I’m fine with it. Some people need prepaid debit cards for reasons some of us on this site don’t understand. Once we can get past that, you need to compare all the prepaid debit cards out there. If her’s is the lesser or all the other evil cards then her card is better. They are all going to charge crazy fees. If her’s charges less then its a win for those people who need these cards.

    I still think they could do better then prepaid cards, but if thats all they want, then at least she is trying to give them a better card.

  13. Robert says:

    Suze’s card is a scam. Ask her to publish the contract details. She will be profiting big time. Listen to Dave Ramsey if you want to get out of debt. He won’t sugarcoat it. Work hard to get out of debt and then live within your means. No one wants to hear that though. Listen to Suze and you will end up in the poor house time and time again.

  14. Mavis says:

    Not surprised that she sold out. Never liked that phony “guru.”


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