In case you missed it, Suze Orman recently announced the “Approved” prepaid debit card. Now, if you’re new here, you may not know how much I hate Suze Orman. But now she has given me even more reason to dislike her, which I didn’t think was possible.
The Approved prepaid debit card is NOT a smart choice, whether it has Suze’s name on it or not.
I’ll tell you why:
1. You pay a minimum of $36 a year in fees. Yep, $3 a month just to own the Approved card, and that’s if you don’t incur any of the other potential fees, like bill pay fees, paper statement fees, ATM fees, etc. This makes no sense when so many banks and credit unions offer free checking accounts with debit cards.
2. The “benefits” are things you can get on your own. After reading multiple articles about the Approved card, this is my understanding: You get unlimited access to your TransUnion credit report and TransUnion credit score (which should NOT be confused with an actual FICO score). Well, guess what? You can access your credit reports once a year for FREE at annualcreditreport.com, and you can sign up for TransUnion’s Credit Karma if you’d like an estimated credit score. Oh, and you are also enrolled in a “credit monitoring service,” which is one of those useless things that no one understands. Zippity doo dah.
3. Debit cards don’t improve your credit. If you’ve ever listened to Suze Orman, you’ve heard her harp about FICO scores a million times, and how VITAL it is to improve your scores. One of the most interesting “features” of the Approved card is the following:
When you agree to be a part of The Credit Project, we will anonymously share Approved Card transaction information with TransUnion so that they may help us understand whether including this data in your credit report would impact your access to credit products.
But guess what? “This data will not appear on your TransUnion credit report at this time.” Which I interpret as, “We want you to think this card will improve your credit score, but it won’t.”
4. Suze herself hasn’t recommended prepaid cards until now. From page 96 of The Money Book for the Young, Fabulous, & Broke (published in 2005):
I don’t think prepaid cards are a viable option, either, since they also aren’t going to help you build a reputation at the credit bureaus. If you can’t get a regular credit card, you are to get yourself a secured card and use it as a stepping stone to a credit card.
Yeah, funny how they weren’t a viable option until she found a way to make $3 a month from millions of people who trust her to tell them how to get out of debt.
5. Suze (or whoever runs her account) lost her shit on Twitter last night. Responses to PT Money’s post about the Approved card, as well as comments from others, led to a mini Twitter soap opera. Several of my fellow bloggers were blocked by @SuzeOrmanShow for daring to question the Approved card. A few choice tweets:
Gee, just the kind of financial guru I want to listen to – one who freaks out on anyone who dares question her complete 180 from her previous advice about prepaid cards.
What This Means for You
Suze Orman may seem like a financial genius, but remember that she doesn’t offer advice from the goodness of her heart. She earns her living encouraging people to make certain choices, like buying her books and FICO kits and paying $3 a month to use her prepaid debit card. She is selling you information that you can easily get for free (and in a much less annoying format).
Don’t be fooled by claims that using the Approved card could “someday” improve your credit. The credit bureaus have never accepted debit card usage as proof of creditworthiness and I doubt they’re planning to start. If your credit sucks like mine, the only way to change that is (1) time and (2) responsible use of credit that actually counts toward your score.
Maybe bank accounts aren’t an option for you for whatever reason. If that’s the case, I can point you to countless online resources for help finding something that does. I’m not saying the Approved card is the worst in the world – I’m just saying you can do better for yourself.
My thoughts on Suze’s fee-riddled card and crappy attitude? DENIED!