The latest financial wisdom that former broker Suze Orman is blitzing about is a prepaid debit card with her name on it. “You can bank on it,” she says.
The personal finance celebrity created the Approved Card, which is issued by The Bancorp Bank, to offer Americans a debit card with low fees that allows them to track spending, protect their identity with free monitoring and stay on top of their credit rating with free reports.
The card costs a minimum of $3 per month, with additional fees to add money to the card any way other than direct deposit, to use out-of-network ATMs and other small transaction costs.
Ms. Orman told reporters yesterday that she is set on changing the credit rating system, which rewards people for taking out multiple credit cards and doesn't award them for paying with cash. To that end, she said her card allows customers to have their transaction data shared with credit-rating firm TransUnion “in the hopes” that after a two-year trial, the firm will decide to show such data on credit reports.
John Ulzheimer, president of consumer education for SmartCredit.com, has called the talk show host's card “the cream of the crap,” noting the fee structure and features are comparable to the best prepaid debit cards already on the market. However, he and most other financial experts agree the category is a dog.
“You are still paying at least $36 a year to have access to your own money,” Mr. Ulzheimer said. “And you're doing nothing to help with your credit.”
Abigail Gardner, a spokeswoman for Ms. Orman, said they had no comment on Mr. Ulzheimer’s characterization of the card.
Financial advisers, acknowledging that Ms. Orman appeals to an audience with fewer funds than typical advisory clients, said there are better ways to have the luxury of a debit card and bypass fees.
“A debit card can have some merit in regulating spending,” said adviser Mike McGervey of McGervey Wealth Management LLC. But most traditional bank accounts typically offer a free debit card, he said.
Mr. McGervey also said he wonders if Ms. Orman should be hawking her own product.
“It might be a conflict because people view her as potentially objective,” he said.
Formerly a broker with Merrill Lynch Pierce Fenner & Smith Inc., Prudential-Bache Securities Inc. and P&I Equities Corp., Ms. Orman hasn't been registered with the Financial Industry Regulatory Authority Inc. since 1991 and she is not a registered investment adviser, according to regulatory records.