In the world of personal finance, Suze Orman is widely considered to know her stuff.
But the TV personality, author and motivational speaker couldn't predict the firestorm that would result when she recently released a branded, prepaid credit card.
"The Approved Card," is part of Orman's mission, called "People First," to make finance more accessible to consumers.
But its release has led to some pushback.
Prepaid Cards, Explained
A prepaid credit card allows consumers to load money onto it before making any purchases, and its limited funds make it appealing to people with poor credit who can't or shouldn't secure a traditional credit card of their own.
Features of this new card include free, unlimited credit reports and scores from TransUnion, free identity protection and FDIC insurance up to $250,000 and access to a dashboard where you can track your spending and save toward five different goals.
But critics of the new card find it isn't as consumer friendly as it claims to be.
Namely because, even though Suze herself speaks out against paying fees, her card includes fees to:
- Purchase or replace the card ($3)
- Maintain it monthly ($3)
- Speak with a customer service agent more than once a month ($2)
- Make ATM withdrawals if you don't deposit at least $20 per month or withdraw outside of the Allpoint network ($2)
- Receive a paper statement ($2)
Orman says the fees—a full list is explained on the card's website—couldn't be avoided due to rules and regulations, but that the maintenance fee is lower than the average for prepaid credit cards, which exceeds $4.
Experts are still critical. They point out that the credit score calculated by TransUnion isn't the FICO score most companies consult and that while this card might be better when compared to similar products released by celebrities (remember the Kardashian Kard?), prepaid credit cards are a bad idea overall.
A Perfect (Social Media) Storm
In the past week, Orman has taken to Twitter not only to defend the allegations against her card, but to go on the offensive. After Tweeting that Philip Taylor of personal finance site PT Money was an "idiot," she was forced to apologize to both him and to New York Times reporter Ron Leiber, who published a piece on her card earlier this month and with whom she engaged in a Twitter spat.
Of course, we can't know yet if the card will be a success, but, in the meantime, Orman has aligned her face and formidable reputation with its launch.
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Image Credit: flickr.com/greginhollywood