As many people know, the cost of banking has been increasing. While there are still many account options out there that offer free checking and savings, the “hidden” fees associated with these accounts are going up. New regulations make it harder for banks to charge consumers money, so they make up for it by increasing their overdraft fees and their out-of-network ATM fees. The decision by Wal-Mart to offer a prepaid American Express card called the Bluebird card that targets those who are upset by banking fees.
The Bluebird card looks, functions, and feels like a debit or credit card. However, there is no credit check to obtain on (users must be 18 and older though), there are no hidden annual or monthly fees, and surprisingly, there are no overdraft fees (most likely the card will simply be declined if the consumer tries to make a purchase larger than the amount on the card). So how do Wal-Mart and American Express make money off the card? There are a few different ways.
Going into Wal-Mart and signing up for the card, the consumer will have the option to load the card with between $1 and $500. Regardless of the amount put on the card, the fee is $5. For those who wish to avoid this fee, they can head to www.bluebird.com and load their card for free from their bank account, or pay $2 to load it from their debit card. The card will offer a direct deposit feature via their app. The consumer can simply take a picture of his or her paycheck, and upload it to their account. While many prepaid cards are valid only at the issuing retailer, the Bluebird card will be available for use anywhere. This means every time the card is swiped, both Wal-Mart and AmEx will collect a swipe fee.
For those who need to get cash back off their card, they can utilize any one of the 22,000 Moneypass ATM’s nationwide. If there is not one convenient, the card does charge a $2 out-of-network fee (this is in addition to the fee imposed by the institution that owns the ATM).
The card will offer many of the perks associated with a credit card, such as fraud protection and if it is lost or stolen it can be replaced at no charge.
Wal-Mart is also associated with Green Dot, another company that offers prepaid cards. They have not indicated that they will be doing away with their Green Dot contract, and instead it looks as though they will be offering both cards together in an effort to expand their financial services to their customers.
Wal-Mart has long been a mainstay in the American culture. They offer many quality products at very competitive prices. Since they attract a number of customers that do not have the financial education to maintain a bank account, the choice by Wal-Mart to offer a prepaid American Express card to expand their services is a way to help educate and empower the consumer. For those who are already diligent at maintaining an adequate balance in their account, and can use a credit card responsibly, this may not be a good choice. For those fed up with bank fees, or do not have the discipline to keep track of their accounts, the Bluebird card (scheduled to be available the week of October 15th) may fit their needs perfectly.