Wednesday, December 1, 2010

Prepaid? Dude, you haven't even begun to pay... (more on the usury front).

The poor Kardashian sisters, on a break from sticking body parts at us on magazines in the supermarket checkout line, were hired to represent a "Prepaid Kardashian Debit Master Card."

Now, the poor girls are trying to bail on the product, having discovered that the credit cards are by and large a poor instrument for personal finance.

I know the temptation is to type cheap jokes about the Kardashians, but the real issue here is the people marketing the card.

They hired the Kardashians to market the product to teenagers. Said a spokes-hack for the usurers,

“There are no other better people to represent this card because of their significant fan base, especially to reach the younger audience...”

The card is a wonderful instrument for training teens in prudent personal finance, after all, they can only spend the amount of money they actually pre-loaded on it. Oh, but then

It costs $59.95 for six months of use, $99.95 for a year, and $7.95 per month after that.

Use it for ATM cash? $1.50 per pop.

Check your balance? There's a dollar penalty for being responsible.

Talk to a rep on the phone? $1.50 per call.

Cancel the card? $6.

Lost card? $9.95 replacement fee. (High grade plastic, I guess).

Ahhh, but the Mobile Resource Card people (I wonder if that name means they operate out of their car) say it is an exercise in wise financial practice, because parents can choose to track their kids' spending. "Never mind the ridiculous fees at every turn, kids. As long as you don't overspend your balance I don't mind if they charge you whatever they want."

Once again, we let an industry allure people into bad habits, then blame the consumer for the negative impact.


JC Fremont said...

This is one of the consequences of training young people to be consumers instead of citizens. Sad.

Grace said...

As a parent of teens I'm horrified by the predatory nature of these schemes. Fortunately, here in the frozen north there are alternatives. We chose to get each child a checking account at age 16 with a local credit union and a debit card. They can learn how to manage without all the fees and fuss. Much much better.

But I'd have to say that JC Fremont makes a point... a few years ago in middle school my dd was told in a real world exercise that she *had* to have a car payment. She couldn't just pay for the car upfront, or buy a used car... she *had* to have a car payment.