Today, the Kardashian sisters are putting name and celebrity status behind a Mastercard prepaid card. The sisters, Kim, Khloe and Kourtney, are the latest in a line of celebrities who have launched branded prepaid cards, including Russell Simmons, Lil Wayne and Amar'e Stoudemire. [Disclosure: the Amar'e card is an UPside Visa Card. operated by Plastyc, where I am the CEO.]
It's good that celebrities are raising awareness of reloadable prepaid cards. These cards are a great option for people who don't have traditional bank accounts, and their use is growing in general. They are also a good way for teenagers to handle money more responsibly than borrowing Mom's or Dad's credit card, provided parents can supervise and control their teen's prepaid card account. Nearly 12 million people are expected to have one by 2014. Unlike a credit card, you can't run into debt using them. Unlike a traditional checking account, there are no overdrafts. They use trusted payment networks such as Visa and Mastercard and most of them are federally insured. You can also receive direct deposits of salaries into these cards, a much better alternative to cashing a paper paycheck at check-cashing stores which can charge outrageous fees.
I haven't seen the Kardashian's new card yet. It's scheduled to be available tomorrow, November 10. But here's how reloadable prepaid cards work in most cases:
Another item to look at are features. Some cards have most of the features of a traditional bank account, including the ability to issue paper checks. Or they have features aimed at specific demographics, such as mobile payments, budgeting tools, or parental controls for teenagers. Make sure the prepaid card has the features you want.
Shopaholics beware! Money and emotions are a dangerous mix. Most celebrities do not need to watch their spending, but most of the rest of us do.
If you like the idea of a reloadable prepaid account but you don't like the fees or features of the celebrity card you're reviewing, check around. There are many, good alternatives.
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