Suze Orman Launches Her Own Pre-Paid Debit Card

Really wish I’d know about this when I chatted with personal finance personality Suze Orman back in December. The TV host/author/owner of the whitest smile on Earth is set to announce her own pre-paid debit card, which she promises won’t be a pile of fee-laden crud like the one the Kardashian sisters slapped their name on in 2010.

Suze admits to the NY Times that her card does come with fees, including a $3/month fee that is deducted from the balance, but she says the costs associated with her card are lower than what you’d regularly find in a pre-paid debit card.

What she is hoping will differentiate her card from others is that she’s made a deal with credit bureau TransUnion that will give cardholders unlimited access to their TransUnion credit report and score (not their FICO numbers).

Additionally, since credit bureaus don’t generally factor in debit card data into their credit reporting numbers — meaning that people can’t use them to build up any sort of credit history — Suze has talked TransUnion into collect spending data from the users of her pre-paid debit card. Whether or not the credit bureau uses that information to inform its reports and scoring is still up in the air.

“There is something radically wrong here,” she tells the Times about credit bureaus ignoring debit card data. “We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.”

The Times’ Ron Lieber even got Orman to swear an oath that she wouldn’t cave in and start raising rates on users during the next two years if the card was not profitable.

“I am not going to make money off the 99 percenters’ backs,” she promised, saying she would close down the business if it came to that.

Now it’s just time to play the old wait-and-see game.

TV Adviser on Money Offers Card [NY Times]

Comments

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  1. spamtasticus says:

    Cash is king! The only anonymous monetary vehicle.

    • Cat says:

      Cash is king! The only anonymous monetary vehicle.
      Not for long if Big Brother has his way.

      That’s why I demand payments in fish. Or quatloos, on planets where there are no fish.

      • Duke_Newcombe-Making children and adults as fat as pigs says:

        I’d only accept quatloos on Triskelion. They give the best odds, er…exchange rate.

  2. gman863 says:

    This is the biggest career wrecking move since Ben Stein did the ads for a credit score report company.

    • HomerSimpson says:

      They’re just trying to cash in (or “out” depending on your perspective) before the whole thing collapses, no matter what they say to the contrary.

    • Ben says:

      What about that awful Creation/Intelligent Design movie he did?

      • gman863 says:

        Stein’s made several blunders; however pimping a paid credit report service ruined his unbiased reputation for giving financial advice.

  3. Fast Eddie Eats Bagels says:

    Why can’t I just pay the bureaus a “fee” to give me a good rating? Oh wait wrong bureau…

    • HomerSimpson says:

      You’re not one of the special people…add some more zeros to your bank account balance and they’ll be more than happy to.

  4. CreditSense-CreditRecovery says:

    This card will do NOTHING to help people improve their credit. Suze gives out so much misinformation it’s not surprise she’s shamelessly trying to tap into her huge “credit repair” database and make more money off of them by selling them the idea of her pre-paid debit card.

  5. veggie says:

    Suz(i)e always wants to change her paradigm to get more money from us, the consumers.

    FICO kit informercial anyone? Maybe now she can sell a Transunion debit score kit soon.

    Identity protector: another $15 / month per rip-off.

  6. TasteyCat says:

    I’ll stick with my no fee credit cards.

  7. 401k says:

    The reason credit bureaus don’t use cash to inform their reports is because IT IS NOT CREDIT!!!

    A credit report used information about your repayment of debt for potential future debtors to decide if you are worth the risk of lending to.

    Someone who uses cash all the time may not have any extra to service debt, they may be on a very tight budget. It will not help someone who lives paycheck to paycheck to suddenly have their cash purchases help them get credit they may not be able to repay above their monthly expenses.

    I work as a collector for a credit card company, and too many people who are living on a tight budget think of a credit card as a way to get needed products/services when they don’t have the cash. They don’t think about what will happen when they can’t make that monthly payment.

    Please, use credit wisely.

    • KyBash says:

      Credit scores are used for many non-credit things — car insurance rates, rent, and job-worthiness to name just a few.

      People who use only cash deserve to have their good habits reported by the bureaus, OR the bureaus need to be banned from selling credit scores for non-credit purposes.

      • Cat says:

        OR the bureaus need to be banned from selling credit scores for non-credit purposes.

        This. So much this.

        • Such an Interesting Monster says:

          Exactly. Either companies that don’t offer credit should be blocked from using your credit score against you OR they must be required to report your payment history with them and have that act with the same weight as any of your other credit data. The system we have now is bullshit.

      • frank64 says:

        Yes, but that wouldn’t be in a report focused on use of credit. The lack of anything negative on the report is something these other places should consider. It is not the credit report or scoring that is the problem it is the companies that use it as the end all and be all. It is supposed to be a tool, that is all.

        There are many stores and banks that offer small loans and cards for someone just starting out. This is how one builds a reputation as someone with low risk. You can pay in full every month. Getting credit is in general too easy and I know many that would have been better off without it. Using a debit card is not the same thing, although a bank could look favorable on account holders who does use it responsibly and start someone off with a loan or credit card. Nothing is broken. Maybe some banks will want to use this info to issue credit. If it ends up helping someone get started, then great.

    • DariusC says:

      If they are using it on stuff they need, they are probably so far in the hole that thing’s couldn’t possibly get worse. If they have a choice between getting food or going another day without, I think they would charge to their card. Even if that means paying for it a month or more down the road through a late payment or credit hit.

  8. Nobby says:

    But aren’t all debit cards “pre-paid”, so to speak? It’s not like they allow you to spend money you don’t yet have, unlike credit cards. Or do they?

    • Mikey1969 says:

      Well, you can go into overdraft, if it’s an option on your account, or some let you run things through as credit if you want(Comes in handy for gas a couple of days before payday, since they just put a hold of $1 on the card.).

      Otherwise, you’re right, it IS a prepaid card, and those two are really exceptions to the rule.

  9. Swins says:

    She’s done stick a fork in her.

  10. msky says:

    AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH!!!!!!!!!!!!!!!!!!!

  11. Cat says:

    This is why I listen to Clark Howard vs. Ms. Orman. He’s one of the few things I missed on Pay TV. PlayOn + Roku got him back for me.

    • Cat says:

      Although I will add, that for a small number of people, this would be about the only way to start establishing a credit history, and the price is low relative to other options in the pre-paid card market.

  12. DragonThermo says:

    “I am not going to make money off the 99 percenters’ backs,” she promised.

    Wait, what? What’s the $3/mo fee for then if she doesn’t get a cut of it? She, or the bank behind it, is already getting a cut of the transaction fees. Why should the 99%-ers pay Suze Orman to let them access their own money?

    And another thing, is the differentiation between the evil 1% and the oppressed 99% is that the 99% can’t get credit cards? If that’s true, that is even more proof that I’m the 1%. I’ve always suspected that I’m the 1% because I have a job and pay income taxes, but the fact that I am able to get credit cards with no annual fee (much less a $3/mo fee) means that I am definitely the 1%.

    • Cat says:

      I really think this is aimed at the bottom 20%.

    • RvLeshrac says:

      I like that you fail to understand even the simplest of concepts, instead substituting in a bizarre fantasy world made up of shit no one has ever said.

    • kosmo @ The Soap Boxers says:

      She won’t make money off their backs.

      She’ll make it off some other body part.

      Yeah, this definitely seems like an odd comment to me. If she plans to make money from the card, then it will obviously be from the 99%ers. Maybe she plans to break even.

  13. SkokieGuy says:

    “Suze has talked TransUnion into collect spending data from the users of her pre-paid debit card”

    Really Suze? You had to twist their arm to capture purchase data that they will no doubt sell to others. How much are you being paid by Transunion for them to access this data?

    Spending data on a prepaid card has zero to do with credit and has everything to do with market intelligence.

    Interesting that laws now prohibit monthly fees on Gift Cards, but its still allowed on prepaid debit.

    Suze apparently has no problem whoring her name for something that caused nationwide outrage when the big banks instituted a $5.00 monthly debit card fee? Why exactly do you think this will fly, because you’re $2.00 cheaper? Because of your bright smile and perky hair?

  14. Andy Dufresne says:

    So a $100 card will run you 36% per year in fees. Nice work Suze.

  15. wetrat says:

    I think people who are comparing this to gift cards will find that the fees are high (e.g., the poster who said fees amount to 36% on a $100 card is correct when implicitly assuming that this will be given as a gift with a one time amount)… but this card is not being targeted at people who would use gift cards.

    It is much more like Walmart’s money card. It includes bank-like features such as direct deposit, electronic bill pay, etc— it is basically for people without a bank account. If you think about the many fees that may be associated with a traditional bank account and debit card, this card would likely come out cheaper. Most banks charge much more than $3/month if you do not maintain minimum balances, monthly direct deposits, etc. For the poor person living on the edge, this is a way to get an electronic payment method without having to use a bank.

    I am not defending or promoting this product, per se… just trying to add some perspective on the uses for which it is targeted.

  16. rpm773 says:

    I don’t know. In order to demonstrate how bad prepaid debit card deals can be, one has to gain a following of consumers and then offer a prepaid debit card of his/her own. Then, and only then, will the followers understand

    /s

    Meh. Everyone has his/her price. Looks like someone found Suze’s.

  17. dolemite says:

    She states by signing up, you get free access to your credit report from TransUnion. I recently signed up for Credit Karma, which is sponsored by TransUnion. It gives you a free credit score, and you have information on all of your currently open accounts. Not only that, but you get free credit monitoring with the service (that recently started). The only downside is the site is littered with advertising.

    • Nigerian prince looking for business partner says:

      What kind of credit score does it give? I was under the impression that the only way to get a FICO was through myFICO or directly from a bank.

      • dolemite says:

        It gives you TransUnion’s credit score, which I believe is part of what FICO is based off of. So its only a portion, but normally your FICO is only going to differ a few points from any one company’s score.

        The part I like about it, is you can see all your open accounts in your name. So unlike a credit report, you don’t see all the accounts you’ve paid off, etc. Also lets you see if anything fraudulent is open in your name. I’ve always wanted something like it, but I honestly can’t see paying $10 or $12 a month to monitor credit. Free…now free I can do, even if it isn’t as detailed as some of the ones with fees involved.

  18. Loias supports harsher punishments against corporations says:

    No FICO score but some pointless TransUnion score? Suze is being rather hypocritical on that one, as I’m sure she reports to check your FICO score, not your Suze Orman(TM) Score.

  19. jasonq says:

    Since the article brings it up…what’s with her teeth anyway? I mean…they’re bizarrely white. Painfully white. So white they’re blue, like those headlights on some cars.

  20. Emily88 says:

    I just watched her interview on GMA about this. For those complaining about the $3 fee, she said, basically, that if this works the fee will go away. I would totally get this card if it means getting a better credit score. I have no credit cards, but I also have a low credit score. Yes, credit reports are so potential future lenders can decide if you are worth the risk of lending to. But they don’t reflect you paying your monthly bills, including rent. Just because I don’t have a high credit score doesn’t mean I can’t make a house payment! I am not a believer of spending beyond your means. If you can’t afford it, save up until you can! However, that doesn’t fit for buying a house (by the time I saved up for that, I’d be dead). And that is where this card comes in, in my opinion. So watch my debit purchases, let me prove I pay my bills, bump up my credit score so I can buy a house, TransUnion! Better yet, watch the debit card I already have!

  21. Haggus says:

    Here up, north of the 49th, there is one bank via a grocer that offers a free debit card. For the last seven years, I haven’t had to pay one Canadian cent to them for the ‘priviage’ of spending my money.

  22. n0th1ng says:

    $3 a month? Uhh those are fees. I personally use the Amex Prepaid card, no fees whatsoever unless you use it as an ATM card more than one time in a month. Load it up and you can have your cash on there forever.
    http://www.americanexpress.com/prepaid

  23. PortlandBeavers says:

    I don’t consider that “paying with cash.” Paying with cash is using currency.

  24. gman863 says:

    Maybe she’ll co-brand the card with Birkenstock to narrow the target market.

    (Since I’m gay, this comment is allowed based on Jerry Seinfeld’s rule that self-hate jokes are OK)

  25. Mikey1969 says:

    //””There is something radically wrong here,” she tells the Times about credit bureaus ignoring debit card data. “We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.””//

    Um, Suzy? They ARE called “credit ratings” for a reason. As much as I absolutely HATE the crap the credit companies pull, the reason that cash doesn’t factor into it is because it isn’t CREDIT.

    And as for this:
    //”What she is hoping will differentiate her card from others is that she’s made a deal with credit bureau TransUnion that will give cardholders unlimited access to their TransUnion credit report and score (not their FICO numbers). “//

    And that number does you absolutely NO good whatsoever. We are in the process of getting everything straightened out enough to by a house, and it took 2 years before anyone piped up and let us know that they ‘Free Credit Report’ was an absolutely worthless piece of paper, since FICO scores are what most people look at. There is actually a class action suit going on regarding the misleading advertising by companies like freecreditreport.com. The only good thing about their site is that we get notifications when any kind of credit check is done, or when any accounts are added to our credit, but the actual numbers ca be off by 75 points at times.