CNBC personality and popular personal finance expert SuzeOrman has just unveiled a new consumer payment product that will bear her name. “The Approved” MasterCard is a prepaid debit card that many consumers may find to be a welcome addition to the current prepaid card market. Right from the start “The Approved” differentiates itself from the pack of other similar products which have taken a more than a bit of flak from experts for poorly disclosing the often exorbitant fees which come attached to their usage. Ormans card is fairly straightforward in addition to being fairly inexpensive as far as prepaid debit cards go. It will cost users $3 to pick up an “Approved” card, and then they will pay just a $3 monthly fee as long as they load a minimum of $20 to the card each month. There is potential to be hit with other fees for things such as using the card to withdraw cash at an out-of-network ATM.
In the past, prepaid debit cards, which are not linked to a bank checking account as traditional debit cards are, were primarily marketed towards consumers who aren’t able to obtain a bank account or a credit card thanks to having no credit history or extremely poor credit. However, prepaid cards have begun to appeal to a wider cross-section of the population. Ever since the Great Recession, more and more people have turned towards prepaid cards as a way to control their spending and keep their debt in check. Because it is impossible to overspend on a prepaid card, it makes adhering to a budget easier for some. Also, because of a growing sense of disgust with the banking industry triggered by governmental bailouts and furthered along by the attempts of some commercial banks to levy more fees on their products, many consumers are opting to manage their finances independent of big banks. This has become easier than ever because it is possible for paychecks to be direct deposited onto prepaid debit cards.
Orman has a plan, however, and that it to get credit scoring bureaus to change the way they determine an individual’s creditworthiness.
“There is something radically wrong here. We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm,” said Orman, according to The New York Times.
Orman has managed to get TransUnion to agree to collect an analyze spending data from “Approved” users, which she hopes will be the first step in determining that prepaid debit card users deserve recognition for their responsible spending behavior by having it influence their credit score.
In the meantime, “Approved” cardholders will be availed of free TransUnion credit reports in addition to free credit monitoring services and identity theft protection.