Besides the obvious garbage this ad purveys (we need credit cards, plastic is safer), people who think they want to use products like this need to be aware of the details... First, let's understand what Green Dot is, exactly. It is a debit card on a checking account that does not use checks. So what makes it so special? The fees, baby, the fees!
First, to get one you have to buy the card... The MSRP is a one-time $9.95. That's kinda like going to a bank and being charged to open an account.
Then, you have a $4.95 monthly fee. That's not too crazy - a lot of banks charge a monthly service charge - but then-again, a lot of banks don't. It is very easy to find one that doesn't and save yourself $60/year.
Here's where the fun starts: to load your card (except for direct deposit) they ding you with a suggested $5.95 fee. That's five bones every time you put money in your account. Again, something a regular bank would not charge.
So, why wouldn't you want to use direct deposit to fund your Green Dot card? Well, they don't let you write checks. You don't get access to your account for ACH transactions (a lot of places like utilities, etc use ACH for automatic monthly payments). You don't get a statement!!!! They even say that it isn't good for recurring and "open end" transactions such as online bill payment or renting a car or booking a hotel... The list goes on.
Fees? You should name your new card Fifi... because using it sounds like this, "Fee Fee, Fee Fee Fee, Fee, Fee Fee."
ATM Fee: $2.50 (plus whatever the ATM operator charges) and $3.00 if it is an international ATM.
Cash Advance: $4.00
Balance Inquiry & Transaction History: If you have to call the automated line: $.75, however, if you have to talk to someone they charge $.41/minute up to a max of $1/call.
Balance Inquiry @ the ATM: $.50
ATM Declined: $.50
If you have an authorization hold you need released, $10.
Card Research & Special Requests: $25 (free if involves a billing error or unauthorized transaction)
All this stuff you get at a bank for free... except some ATM charges. So why would someone choose to use this type of service? Because the ad says to! Because everyone knows that plastic is safer than cash! But in the end if you stay away from these high-fee cards, you'll have more of your cash left over. If you're carrying $500 cash in your pocket and get mugged, you lose the $500. If you use this card very long, you'll lose a bunch in fees. But what are the chances you're going to get mugged? Minimal. And what are the chances you will get killed with fees? Maximal, if you use this kind of card. This doesn't even bring the fact that people spend more when they swipe vs. when they pay with cash. Studies say that people who swipe spend 18%+ more than those who pay with cash... And I heard (I think on the Dave Ramsey Show) that McDonalds found that spending went up by as much as 35% when they started accepting plastic.
As for the "safer than cash" claim, check out this FAQ from their website:
Question: What if someone steals my Card or uses it without my permission?
Answer: You should treat your Card as if it were cash. Guard the account number the same way you would cash or any credit card. Do not share your Card number with anyone. If you lose your Card or believe it to be stolen, you must immediately contact our lost or stolen Card hotline at 1-877-434-3578. We will cancel your old Card, transfer the remaining balance to a new Card and then mail it out to you at the address on file. Fee applies.
Labels: Big Plastic, Credit Cards, Debt Ads on TV, Debt Propaganda
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