To me, the checking account we have at Bank of America is the center piece of the financial system for our family, even though it doesn’t earn us any additional money. It is the first stop our incomes, including salaries and business, hit and from there, the money goes to pay bills, earn interests after being transferred to savings accounts, and various investment accounts to buy stocks and mutual funds. Since almost all the activities that make our household function rely on the checking account, I have resisted the urge of earning extra dollars by switching to a interest-bearing checking account that pays interests for money kept in the account. I don’t want any disruption of our system.
Even though it’s hard for us to imagine what our daily life would look like without a bank account, what millions of families in this country lack is just that, a bank account. According to a recent FDIC study, 8.2% American families, total 10 millions of them, live without a bank card, for various reasons. One of reasons cited in the study for having no bank account is high monthly fees and minimum balance requirements imposed by growing number of banks, as I also noted in an early post. And for the 10 million households, about 20% of them opted to prepaid credit or debit cards instead to conduct their daily business for the simple reason of avoiding the high fees.
Now for those who are thinking of using prepaid card instead, there’s one more alternative to consider: The Bluebird Prepaid Debit Card, jointly launched by American Express and Walmart on October 8, 2012. The target consumer of this new product is, according to AMEX, “poorly served by traditional banking products.” The Bluebird Prepaid Card, which has been tested by AMEX since late last year, includes features such as
- No minimum balance
- No monthly fee
- No annual fee
- No overdraft fees
- Deposits by smartphone
- Mobile bill paying
Since the card aims to provider a cheaper alternative to those bank accounts that either charge monthly fees or require a minimum account balance to avoid them, it doesn’t surprise me that it essentially eliminates those two. However, there’s one charge that I don’t like. For people who use Bluebird cards to withdraw cash, there’s no fee or surcharge for withdrawing cash from American Express ATMs for only those who have enrolled in direct deposit into the account. Without such an arrangement, a $2 fee will be imposed for each withdrawal. The way I look at this charge is that people should not pay anything for withdrawing their own money, especially for the part of 10 million families without a bank account that don’t really have regular income.
The Bluebird card will be available next week online and in more than 4,000 Walmart stores across the nation.
