…from American Express and Walmart
Yesterday’s launch of the new Bluebird Prepaid Card from American Express and Walmart has created quite the buzz given what it indicates about the two companies’ business objectives. However, since consumers are sure to be more interested in whether or not it’s actually a good product, Card Hub has evaluated this newest addition to the prepaid card market by comparing it to the best existing offers, as identified by Card Hub’s 2012 Prepaid Card Report.
More specifically, Card Hub analyzed the Bluebird Card’s costs for different types of usage, its pros and cons, and the features that consumers can write off as marketing fluff. The findings, which resulted in Card Hub naming the Bluebird Card the Best Overall Prepaid Card, can be found below along with insights from Card Hub CEO Odysseas Papadimitriou, a personal finance expert who previously served as a senior director at Capital One.
Cost
• Alternative Checking Account: The Bluebird Prepaid Card can be free to use as a replacement checking account, as it does not charge fees for activation, monthly or annual maintenance, or ATM withdrawals at 22,000 MoneyPass ATMs nationwide if you are enrolled in direct deposit. The fact that it also offers online bill pay means it is on par with the GreenDot Gold Prepaid Card, which was Card Hub’s selection for the Best Prepaid Card to Use as a Replacement Checking Account in 2012.
• Child’s Allowance: The Bluebird Prepaid Card allows you to load funds for free via a bank account or mobile check deposit, which means parents can give their kids an allowance without wasting money on fees. However, if you load funds in this manner, all but your first ATM withdrawal each month will cost $2. This card could therefore be more expensive than the Kaiku Visa Prepaid Card, which has a $1.95 monthly fee but does not charge for ATM withdrawals at Allpoint’s 43,000 ATMs nationwide. The Kaiku Card was launched after the 2012 Prepaid Card Report came out but represents a lower-cost option than the study’s choice for the Best Prepaid Card to Use as a Financial Teaching Tool, The Approved Card from Suze Orman.
• Alternative Check Cashing Tool: While you can deposit checks for free by taking a picture through an Amex mobile app, you’ll have to pay $2 for all but your first ATM withdrawal each month when you do not have direct deposit. Depending on how many times you hit the ATM per month, the Bluebird Card could therefore be either slightly more or less expensive than Chase’s Liquid Card, which has a $4.95 monthly fee and was Card Hub’s choice for the Best Prepaid Card to Use as a Check Cashing Tool.
Odysseas Papadimitriou (OP): “It’s clear that the Bluebird Card can be immediately considered a top-tier prepaid card offering. The fact that its only major fee is a $2 charge for all but your first monthly ATM withdrawal – which is waived for those enrolled in direct deposit, means that it will be among the least expensive prepaid cards, depending on how exactly you use it. The ability to load funds via check by taking a picture through Amex’s mobile application also makes it one of the few cards suitable to be an alternative check cashing tool.”
Pros
• Mobile Check Deposit: The ability for consumers to load funds to their cards by taking a picture of a check through Amex’s mobile app was mentioned above, but it bears repeating because it addresses one of the unbanked population’s main needs.
• No Foreign Exchange Fee: The fact that you can use this card overseas without incurring additional fees is undoubtedly a big plus, since not everyone may want to open a no foreign transaction fee credit card. Keep in mind that MoneyPass does not yet have any international ATM locations, which means it might not make the best way to withdraw cash when traveling abroad.
• Purchase Protection: If you buy something that breaks accidentally or is stolen within 90 days, American Express will reimburse you up to limits of $1,000 per occurrence and $50,000 per calendar year.
• Global Assist: This service gets you access to emergency translation services, referrals to doctors and lawyers, prescription replacements, and aid sending urgent messages home when traveling abroad.
• Ability to Establish Subaccounts: Cardholders can establish up to four subaccounts for their Bluebird Cards. What makes this different from other cards’ ability to designate authorized users is the fact that you can set custom spending limits for each subaccount as well as either enable or disable account features such as ATM access.
(OP): “American Express has really made its mark on the Bluebird Card via the range of standard account benefits offered to cardholders. Features such as purchase protection and travel assistance will certainly be welcomed by those folks who do not use credit cards and therefore are not usually afforded these services. The ability to establish subaccounts could also prove very helpful for a parent who is utilizing a prepaid card as a financial teaching tool and a means of dispersing allowances to more than one child.”
Marketing Fluff
• Entertainment Access: Unless you are a hardcore fan of sporting events, concerts, and the like, this common Amex benefit will likely have little practical value to you, especially considering the fact that the tickets and access it provides typically still come at a high price.
• Roadside Assistance: You might think that getting help if your car breaks down or runs out of gas would be great, but you are responsible for the cost of all the roadside assistance services that the Bluebird Card facilitates. Given that you could just as easily call a tow truck, gas station, or locksmith as Bluebird customer service, this doesn’t provide much benefit.
(OP): “Pretty much all financial products come with their share of marketing fluff, and when you get down to it, the things that are advertised along with the Bluebird Prepaid Card are pretty tame. As long as consumers recognize that entertainment access and roadside assistance are either less attractive than they seem or are available via other cards, the marketing language shouldn’t prevent them from making an accurate determination of whether the Bluebird Card will benefit them or not.”
Cons
• ATM Fees: If you are a heavy ATM user and do not plan to enroll in direct deposit, the fact that all but the first ATM withdrawal made each month will cost $2 could make the Bluebird Card an expensive choice.
• No Automatic Loading of Federal Benefits: Recipients of federal benefits such as Social Security, a federal pension, or VA benefits won’t be able to have them automatically deposited into their Bluebird Prepaid Card accounts.
(OP): “It’s truly a testament to the Bluebird Prepaid Card that a somewhat avoidable charge – the $2 ATM withdrawal fee that you incur at non-MoneyPass ATM locations or anywhere when not enrolled in direct deposit – is its primary flaw. After all, it’s really only a big deal for people who are high-volume ATM users. While the inability to set up automatic deposits for federal benefits is likely to only affect a small subset of potential cardholders, it is our hope that this feature will be added soon and is only missing now because of the time it takes to establish the requisite infrastructure to facilitate this process.”
Final Verdict
(OP): “Overall, the Bluebird Prepaid Card seems like a great addition to the growing prepaid card market. Not only is it one of the few cards out there that’s even suitable for each of the main ways consumers use prepaid cards, but it’s also one of the least expensive options for each application. From online bill pay to the ability to deposit checks via smartphone, the Bluebird card offers the features that people need when looking for a replacement checking account, alternative check cashing tool, or starter financial product for their children. The only thing prospective customers have to watch out for is racking up ATM withdrawal fees if they are not planning to enroll in direct deposit. However, this will only become a big deal if you take money out multiple times each month.”
