Russell Simmons To Cut Fees On His Prepaid Credit Card

NEW YORK -- A little celebrity competition may be good for the prepaid card market.

Hip-hop mogul Russell Simmons says he plans to trim several fees on his prepaid card, which works like a debit card but isn't linked to a checking account. The announcement comes just weeks after financial guru Suze Orman introduced a prepaid card of her own.

Simmons said the fee cuts are the result of rapidly growing demand for his RushCard. He said the bigger profit margins have given him flexibility to cut fees and roll out new services.

But he noted that Orman's entry in to the market should only fuel that growth and push fees down further.

Comments

[Jay Gould]

03:59 PM on 01/27/2012

Everyone seems to be issuing prepaid cards these days, making all kinds of claims along the way, ranging from mildly untruthful to plainly absurd and Russell Simmons is certainly not the exception that proves the rule. But the latest controversy involving Suze Orman's prepaid card was a more instructive one, I guess because it attracted more interest. It confirmed my belief that the vast majority of Americans are very ill informed about this type of payment card, a fact which Orman unfortunately tried to exploit, even as she was denying it.

The bottom line is that prepaid is the best card only if no other option is available to you. It does not help you improve your credit score, in fact it does not affect it in any way. The same is true for debit cards, which are, however, a much better, and cheaper, alternative for consumers who are not cut off of to the financial system, even if they have to pay a monthly fee for it. So get a credit card, if you can, use it within your means, so that you can pay it off in full at the end of each month, and you'll be better off in the long run. http://blog.unibulmerchantservices.com/prepaid-vs-debit-which-one-is-better

[Gregory Bramwell]

09:51 PM on 01/26/2012

"The cuts are the result of the rapidly growing RushCard?" No. It's the result of rapidly growing competition. I admire Russell, but his stance as a businessman does not allow him to be 100% honest everytime.