Photo Credit: Shaun Egan/Stone/Getty Images
Tuesday Wal-Mart announced its plans to offer a new prepaid card and debit account in partnership with American Express. Unlike their current prepaid card, The Money Card, which has a $3 monthly fee, the new account, Bluebird, will not require any upfront fees. Unlike a credit card, you can only spend as much as you put on the card. And unlike a checking account, you do not receive a check book.
Bluebird will not include any of the normal fees that often turn customers off -- no activation fees, no annual fees, no overdraft fees and no fee for using American Express MoneyPass ATMs -- on top of no minimum balance requirement. (However, there will be a $2 fee to use non-American Express ATMs.) Customers can sign up for a Bluebird account free online or over the phone, or pay $5 for a startup kit in Wal-Mart stores.
“It’s a checking and debit alternative to appeal to tens of millions of customers that just aren’t getting the value they’re expecting (from other banking methods),” said Daniel Eckert, vice president of financial services for Wal-Mart.
The cards will be stamped with an American Express logo and will be accepted everywhere AmEx cards are accepted. Users can set up direct deposit into the account as well as withdraw cash.
Wal-Mart is hoping to appeal to customers fed up with normal banking procedures. And because the Bluebird card doesn’t require a credit check, anyone can sign up for an account. However, regulators are wary of prepaid cards because unlike debit and credit cards, they do not fall under financial regulation laws and are not always protected under the Federal Deposit Insurance Corporation (FDIC).
According to Consumer Reports, prepaid “cards lack the guaranteed protections ... including what happens if your card is lost, stolen, or used for unauthorized transactions, or if the bank behind it fails.” And like traditional debit cards, prepaid cards are often loaded with hidden fees.
Would you consider opening a Wal-Mart Bluebird account? Or are you weary of hidden costs and a lack of regulation and protection?