Lending their names to a reloadable prepaid debit card might be a hot way for celebrities to make money and take up permanent residence in their fans’ wallets, but they’re also widely criticized for their high fees and taking advantage of unsophisticated consumers. Now the cards promoted by two big names who really should have known better, Magic Johnson and Suze Orman, are shutting down. [More]
Prepaid credit cards offer millions of unbanked Americans an alternative to traditional banking. With the number of prepaid card options growing each year, card providers look for new ways to set themselves apart. That’s where name recognition comes into play. We’re not talking about Visa or MasterCard, we’re talking about celebrity like the Kardashians or Justin Bieber. A celebrity attaching his or her name to a prepaid card serves as a great marketing opportunity, but are the cards really any help to consumers? Probably not, seeing as most of the cards are riddled with fees.
Poor Suze Orman. All she was trying to do was launch a prepaid debit card that charges slightly fewer exorbitant fees than the competition, and sort of reports your spending habits to credit bureaus but not really. Then a whole bunch of “idiot” personal finance bloggers began ganging up on her on Twitter, and she had no choice but to lash out and remind them that they’re not real journalists.
Yesterday, we told you about personal finance personality Suze Orman’s decision to get behind a pre-paid debit card that she hoped would be of help to consumers who either couldn’t get a line of credit or wanted to avoid using credit cards. But now that people have had a chance to look at the specifics on Suze’s card, the reaction from some is a bit of a shrug.
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.
You asked, and financial advisor Suze Orman answered. Consumerist readers submitted some questions for the TV host, New York Times bestselling author and motivational speaker and she sat down with Consumerist’s Chris Morran last week to discuss those financial tidibits.
Tomorrow afternoon, bestselling personal finance author and host of her own show on CNBC Suze Orman will be popping by Consumer Reports HQ, and it looks like Consumerist might get the chance to ask her some questions.
But not for her advice* or her fashion sense, as you might expect. In addition to doling out advice on TV and in books, Orman is a licensed insurance broker in California, and in 1999 her firm the Suze Orman Financial Group sold some long-term care insurance to Ann Garat, who developed ovarian cancer two years later. When Garat filed a claim, CNA Financial—the issuer of the insurance—rejected it, saying their fine print stipulated it wouldn’t cover care from family members.
Women’s Wear Daily has published a short biography of Suze Orman, 57-year-old CNBC personality, Oprah repeat-guester, and aggressive promoter of financial advice and self. Her father’s poultry shop burned down when she was a child (“Daddy was a failed man.”). At age 30, she lost $50,000 of borrowed money in oil futures, which led her to give up her dream of opening a restaurant and instead enter a training program at Merrill Lynch to pay back the money. Her second book agent—the one who helped shoot her to the top—told her she had to lose 30 pounds to be marketable. And so on: seeing how someone aggressively pursues media stardom is a sausage-making experience. (That same agent says, “I just thought, ‘Great. Finally an author who knows she can’t write.'”)
In Suze Orman‘s most recent book, “2009 Action Plan,” she urges people with credit card debt to pay off their balances as quickly as possible using the high interest first method. “The fact that you pay just the minimum is a huge warning signal to your credit card company,” she writes, “that you may already be on shaky ground.” Now she’s changed her mind and says you should just pay the monthly minimum and put the rest of your money toward building an emergency cash stash. Based on the way credit card companies have been behaving, we think she has a point.
Slate’s James Scurlock has some harsh words for Suze Orman. He says she’s a liar who is more interested in shilling cruises and luxury car leases than anything else.
“Suze Orman’s 2009 Action Plan” is free to download from Oprah.com for the next week. Unlike last year’s “Women & Money,” this book is intended for pretty much everyone. We haven’t read it, so here’s a line from the Amazon editorial review: “There are safeguards to put in place, actions to take, costly mistakes to avoid, and even opportunities to be had, so that you are protected during the bad times and prepared to prosper when things take a turn for the better.”