I was watching that money class today and I think ironically it wasn’t any of Suze Orman’s financial advice on the show that stuck out to me but rather at one part of the show she was pitching why her pre-paid debit card product was better to use compared to the ones provided by other companies. The first thing I thought was “This is going to give her negative press” since people will probably criticize her for this.
Essentially, from what I gathered on the show she was saying how pre-paid debit cards are bad as you have to pay so many fees to maintain them and also they do not help your credit score as they money you spend on these things don’t get reported to the credit bureaus. However, she mentions that her’s will be reported to the credit bureau TransUnion and has less fees.
Sure enough, I started to read some stories about this on the Internet and it seems like she is on the defensive already with a ton of critics. One thing that was interesting too I thought was that she was saying pre-paid credit cards are getting a bad name from a lot of people who are out of touch with people that are poor. Basically the gist of it from what I gathered was that they have to use it as many companies require you to pay online for example and these people can’t afford nor have the credit score to get say a credit card. So basically her product is a better alternative in her view.
Now obviously for myself I do use a credit card and so any of these pre-paid cards just seem expensive to me and to the point where it probably makes more sense to use cash if you can’t get approved for a card. Unless you have that much disposable income and want the privilege of carrying around a piece of plastic instead.
But to say the “poor” needs to use a prepaid credit card is confusing to me. I can’t imagine any lifestyle where a person has to purchase any kind of essentials where the vendor only accepts credit card payments. I mean there are some people who are financially well off who refuse to use a credit card cause they simply can’t be responsible with it. Is there actually anyone out there that kind of fits in the demographic that Suze Orman is talking about where you as the person think you have no choice but to get a pre-paid debit card?
It’s just kind of of strange as I would think in terms of financial advice she would instead focus in changing the person’s lifestyle to adapt to their financial situation instead. For example, if the person is telling me they need a pre-paid card because they can’t buy stuff online at Amazon for example then I would ask if it is really that impossible to say walk to a store and buy it. I can’t imagine essential services like your utility bills for example where you can’t just pay for it directly through your bank or even using simple online banking.