A Letter to Russell Simmons: Stop Selling Your Rushcard!

Dear Mr. Simmons:

My name is Ryan Mack and I have followed your career for most of my life. I have been a long-time admirer of your work, a tremendous fan, and believe that millions are inspired by the paths that you have created in the field of Hip-Hop. More importantly, as an advocate for financial literacy myself, I believe that the work that you have been doing through the Hip-Hop Summit Action Network as it relates to financial literacy has been second to none. However, I must admit to being somewhat disappointed with your recent pre-paid debit card venture - the "Rushcard."

The pre-paid debit card industry has always been an industry that is built upon a lack of knowledge within the community. It is an industry based upon the legal phrase which demonstrates that "false imprisonment is an intentional tort." In other words, if I put someone in a room and do not lock the door but tell them that the door is locked, they will remain in the room because they believe the door is locked. As a result of my action, I have committed a punishable crime. I view pre-paid debit cards in the same light. Those who know the strategies to empower the community have a moral obligation to those, who may not be as knowledgeable, to fully inform them. There are other more efficient means to empower those in our communities than pre-paid debit cards and other financially destructive establishments such as check cashing facilities. The typical bank offers free debit cards that if used properly do not have any fees affiliated with them and can be used for the same purpose as the pre-paid debit cards.

If we compare the fees affiliated with the Rushcard compared to the typical bank offered debit card, we can clearly see the advantage of the cards offered by the banking institutions.

Rushcard vs. Typical Bank Card

Activation Fee: Rushcard = $19.95 Typical Bank Card = Free
Convenience Fee: Rushcard = $1.00 Typical Bank Card = Free
ATM Cash Withdrawal: Rushcard = $1.95 Typical Bank Card = Free (At Branch)
ATM Balance Inquiry: Rushcard = $.50 Typical Bank Card = Free
Bill Payment: Rushcard = $1.00 Typical Bank Card = Free
Inactivity: Rushcard = $2.95 Typical Bank Card = Free
Refund of Rushcard/Bank Card via Check: Rushcard = $5.00 Typical Bank Card = Free

As you see, there is no financial reason for one to choose the Rushcard over a typical banking institution which offers debit cards as a part of their services. With the continuous onslaught of technology, it is becoming increasingly easier to open bank accounts.

In addition to that, the Black community needs to pay more scrutiny to our spending patterns as excessive consumption continues to present a serious problem within our communities. Over 93% of our dollars are spent on consumption (compared to 85% of all dollars in America spent on consumption); we invest less than 20% less per month than whites; and our net worth as a community continues to remain 20% of the net worth of our white counterparts. The unnecessary excessive fees related to the pre-paid debit cards do nothing but compound the problem by eroding crucial capital that could be used for other important activities such as retirement, entrepreneurship endeavors, higher education costs, home ownership, and/or building a sound financial legacy for our families.

Please do not mistake my intentions. I must admit that it may be possible that there are individual situations where a Rushcard might be appropriate. However, I cannot think of any situations that would be beneficial at this moment. Furthermore, I believe that individuals who do have substantial knowledge about various financial options have a moral obligation to educate consumers about ALL options that are available to them. Mr. Simmons, you and I must continue to take a proactive role in enabling all citizens within our reach to be better suited to make fully informed financial decisions. With these volatile economic times that we face today within this country, America and more specifically our communities deserve that much from us.

I do apologize if any offense was taken from my comments as there was none intended. I am only concerned about the welfare of the people in my community as you are as well. As President of Optimum Capital Management, I have spent the last decade educating people around the world about the importance of being fiscally responsible. As a young, up-and-coming entrepreneur, I started this company to empower my community and fulfill a void that has existed far too long. Since the onset of Optimum I have been featured in Tavis Smiley's book "The Covenant in Action", profiled in Black Enterprise Magazine, named Tom Joyner's "Hardest Working Financial Advisor" of the year, and have appeared frequently on major TV networks (GMTV, CNBC, CNN, BET and FOX) discussing the economy and spreading this important message of fiscal responsibility. More important than any exposure that I have received is what continues to drive me and what continues to feed my passion to work on behalf of my communities. I advocate on behalf of those "hard to employ" individuals in my community, those whom we have helped to receive job training and start their own legitimate businesses, the hundreds of teens we have instructed (many of whom are in transitional housing or homeless), those teens who have learned about fiscal responsibility from our programming and now earn money by teaching adults about financial literacy, the many teens under our guide who have gone on to win scholarships (including the Bill Gates Millennium Scholarship) and started their own businesses, and the thousands of adults who have expressed their gratitude for the economic empowerment that Optimum Capital Management has instilled within their lives. We should all place a very high premium on intellectual capital and I feel that the American people deserve to be exposed to tangible solutions of empowerment.

This is my field of expertise and I only wanted to share my view to someone such as yourself who has great prominence and influence in the community. I urge you to use this influence, as you have done previously though the Hip-Hop Summit Action Network, and speak out against these destructive services that are being offered in our communities: pre-paid debit cards, check cashing facilities, money grams, and all the services which profit by capitalizing on the lack of knowledge in our communities. Making money from ignorance is not the answer...education is the answer and we must provide it. All of our actions must be done for the good of the people and not the good of the pocket. Based on all that you have done for those in our communities, I am certain that you agree.

Regards,

Ryan Mack, President
www.optimum-capital.com

Comments

[Andre Perkins]

I understand what the Rush Card is for and who it is for. NO its not for the person that manages their books great and have an bank account that is not negative. The rush card is a second chance for people who have screwed up on chex systems, telecheck , etc.

Being that it is 2009 everyone needs access to the interenet and they also need access to a major credit card. I think the Rush Card is a great alternative to nothing.

[ryancmack]

It really is great marketing when you say that there are NO other alternatives outside of the Rush Card. Having access to the internet does make things easier, but you can have access to the internet with a secured card which everyone is eligible for. If not that having access to the internet is NOT a necesity but a convenience that might not be worth the cost...especially if you have poor spending habits.

Let me see...if you have poor spending habits is the ONLY alternative to enroll into something that makes you spend more money? It really is laughable when you consider the narrowness of scope of the people in our communities.

[66rock]

Shame on Russell Simmons is all I can say.

Be smart, go with a regular debt card and forget the RushCard. By the way, the name they chose for this card is not lost on me. Think about it.

[WilliePilgrim]

It'd be nice if a person could earn a credit rating for saving instead of spending.

[DeucePrez]

Bro. Mack:

You've stated the EXACT SAME THING that I stated when I first learned of this Rushcard....albeit, you stated it more eloquently....and gave facts and figures as to why the product will NOT benefit (in the long- or short-term) anyone using it.

It has far too many fees and penalties associated with it and it costs monies to "charge" the card (i.e. makes funds available for use of the card).

I have a debit card via PayPal which is connected to 2 of my bank accounts which costs me NOTHING to use AND I get a 1% cashback for using it as a credit card! No...that's not much, but it not a fee either.

[zting]

I have a bank account and I looove my Rushcard! I can text to find my balance (for free), they have the coolest website when you login and they treat me like they value me.

I could go to the library to check the internet. Do you think I should sell my computer and cancel my internet to save money?

[ryancmack]

They do not value YOU! They value those exorbitant, unnecessary fees that they are collecting from you every time you use the card. I am glad that you can at least check your balance for free on the card using text. If you go to another ATM it costs, and by the way¦you can do all of those things that you just named that you value and not have to pay a dime at a bank.

If you feel comfortable giving your money away for services that exist for free of charge by all means continue to use the Rushcard. However, I would highly advise that you get your credit in order, get a better control on your spending habits, and open a bank account. Or, you could find a credit union in your area that has a credit builder program and you can enroll in that. They will assist you to get your credit back in order. Or, you could schedule a meeting with GreenPath Debt Solutions¦they give a first time free consultation to give you instructions on how to improve your credit.

Anyway it goes¦realize the potential that is inside of you. You don"t need to pay for a card that gives you a sense of false prosperity. It does nothing to move you ahead any more than the ability that you have within yourself. I know this to be true even though I have never met you. Good luck!

[zting]

I know how the banks treat me and how they work. I also know how Rushcard treats me and how it works. I'm never going back to a bank and I'm staying with Rushcard.

Ryan Mack, have you ever used a Rushcard?

[DeucePrez]

zting:

I can do the same with my bank accounts and it costs me NOTHING to deposit monies or have my payroll check direct deposited into my bank accounts.

Does the Rushcard offer a percentage refund? Probably not....but it sure comes with more than enough fees....which includes its purchase, funding and use.

[mocha is me]

Ryan, have you ever been in a financial hole. Or did you write this because Russell never replied to your letters?

I use the Rushcard and here is what they do:
- They help me manage my money better. I know exactly what I'm spending on and how fast I spend.
- They don't let me overspend
- I can build a positive credit file.

Here's what a bank did to me:
- They gave me a huge credit limit and rewarded me to spend
- They let me overspend and then charged me outrageous fees for going over
- They ruined my credit history

Not everybody can get a bank account. And banks CHARGE FEES. Your card may be free because they charge people like me.

Can you find a bank that will accept everyone and charge no fees? They don't exist because they got bills to pay too.

[ryancmack]

Let me explain this to you.

You can use a free DEBIT card from a bank to help you know how much you are spending and how much you spend. If you cannot open a bank account then you need to ADDRESS the issue of why you CANNOT open a bank account. While you are addressing this issue you can set up a household budget using the envelope method, cash flow management software, or a simple pen and pad with a budget template. All of these are free solutions that do not make you pay money to use your own money. We have to learn to stop looking at the easy way out if we have a problem. Often the easy way out does nothing more than fill other peoples' pockets and drain our own...which the rush card does.

A debit card will not let you overspend, the envelope method won't let you overspend, DILIGENCE and DISCIPLINE will not let you overspend as well. If you are in need, then every penny counts. Don't deal with the problem that is causing you to overspend, FIX the problem.

THE RUSH CARD DOES NOT REPORT TO ANY CREDIT BUREAU AND DOES NOT HELP YOU IN ANY WAY TO BUILD A CREDIT PROFILE NOR DOES A DEBIT CARD!!! DO NOT BE FOOLED AND THINK THAT IT DOES.

[ryancmack]

NEXT ISSUE -- THE BANK

The bank gave you a CREDIT CARD which is DIFFERENT from a DEBIT CARD. Whether or not you are prepared to get a credit card is another story all together. I am suggesting that you get a DEBIT CARD from the bank of which the limit is only as much as the cash that you put in the account.

If you overspend, then that is not the and do not blame that on the bank. If you have $300 in your account, then budget so that you only spend $300. Lord knows that banks are not perfect. Pull my previous article TOO BIG TO BE RESPONSIBLE and you will see that I do not have a soft spot for banks. However, sometimes the problem is not the bank. Sometimes the problem is you! I hate to tell you, but you have a problem if you need the RUSH CARD to help you manage your money.

YOU RUINED YOUR CREDIT HISTORY by not managing your funds correctly. Why must we always look for a fall guy when we run into trouble. Did the bank tell you to overspend? Did they make you go into your pocket and spend funds that you don't have? You have given too much power to the banks. Take back control of your life and realize the true power that you have within you. This victim's mentality I am sure is inhibiting your financial and comprehensive growth.

[mocha is me]

Ryan, a bank won't accept me now. I still work and get paid. So what should I do:

A. Take my paycheck to a check cashers
B. Keep my paychecks at home till a bank will accept me
C. Have my pay put onto my rushcard

You'll say B. But they won't give me an account. I have to pay rent and buy food. I need the rushcard.

Your hating where you should be loving.

[DeucePrez]

Mocha_is_me:

To answer your question, you can put monies on a PayPal card....and it costs you NOTHING.

So, there you are!

[sdskelton03]

This is nothing more than the black community being taken advantage of by one of their own.

Don't forget that Mr. Simmons possibly also receives1-2% commission on everthing purchased. I doubt, however, that he is giving back any airline miles or such.

[CatfishAndGrits]

Not only pre-paid cards but the check-to-payday loan companies have devasted the AA community.

[2StepsAway]

Prepaid "credit" cards may introduce young people to the word of credit, but at what cost? When I need cash, I go to my ATM. If I cannot get to my ATM at that very moment, I am not getting the cash. Plan ahead. Why would you plan to pay extra money in fees for the convience of having a prepaid card? You do not NEED a credit card. And frankly, I feel having a checking account is far more responsible that having the ability to swipe a card.

I have never understood prepaid credit cards. In fact, I have never understood credit cards that charged a yearly fee. If you abolutely must have a credit card, shop around. You may not get the high credit limit you desire, but if you donot have the credit score or assests, you do not have high amounts of money to put on the prepaid card anyway. Let us get smart with our money.

[DeucePrez]

2StepsAway:

A consumer may want to make an online purchase with an unapproved vendor and, in an effort to not relinquish one's credit card numbers, the consumer may see it worthwhile to purchase one of these pre-paid cards for a one-time use.

So, I'm not completely against such cards. But I agree with the author that the continued use of such card only benefits the company issuing said card and the sponsor of said card.

[IndyReader]

Mr Mack, the definition of "learning" is a "change in behavior". In light of some of these remarks I think you have a very long row to hoe.

[ryancmack]

Brother...this is the fight that we must win if we are to turn this country around!

[Shammie2000]

Question ? does being rich and black mean that you give a darn about those who are poor and black.

[ryancmack]

It isn't about being rich, poor, Black, or White...it is about caring for the peope of your community and in your country. It is about doing the right thing all the time even if you think that people are not watching. The lack of values caused our economic demise and it is the insertion of a higher level of morality that will lead us back to success.

[ryancmack]

BOTTOM LINE: Educate yourself so that you can find the BEST solution for yourself and not the best solution for someone else's pockets.

[msmorisseau]

Kudos to you for challenging us to go higher. And kudos to the other posts for questioning your strategies. The only way we get anywhere is to dialogue and figure this stuff out. Attacking only gets us pissed or gets our feelings hurt... but dialogue......gets solutions....

[msmorisseau]

It is a very defeating feeling to be shamed by your credit score or to be denied access to financial institutions based off of un-informed decisions and/or basic hardship.
Nonetheless, as bitter and painful as it is to say, "Okay, instead of going to this immediate default decision of getting a rush card that is only going to put my money in someone else's pocket and leave me with nothing in return except for access to something that is already mine, I am going to do without that immediate access to my money and instead only use money that I have in cash, and work on restoring my credit so that I can get a bank account..." - it is healthier in the long run for us to take that step.
But what are some suggestions for how to deal "in the meantime"? Because I think that it takes time to get educated about fiscal responsibility and it also takes personal drive and determination, and I think that is probably the most intimidating part of this whole concept. It is much much harder to restore your credit than it is to get a rush card. And we like things easy. But the only way to shift the imbalance of power and wealth in this country (ie. - not letting the White community dominate the financial world) is to get out of "easy", pull up our gloves, suck it up, and start working on some restoration.

[msmorisseau]

Ryan I commend you on your letter. We cannot be afraid to challenge each other's approaches and tactics and should be able to do so without being plagued as a "crab in the barrel" - (to reference the comment about you pulling Russell Simmons "back in the barrel"). I do not feel that is your intention at all. We have to help keep each other in check because no one else gives a damn. If you love your community (and I get a sense that you really do), then you advocate for them and put the fire under them. So be it.
We are always so quick to defend our right to spend money that we rarely access the health of our spending habits, or the irony of paying money to use our money. It is going to be a bitter pill for most of us to swallow- the idea of not getting a rush card when money is such a necessity (though many of us spend it more luxuriously rather than out of need). I think it is hard for anyone to really access their behavior and point the finger at themselves when it comes to things like not being able to get a credit card or not having enough of a strong financial status to get a bank account. Because we have been quite abused as consumers and taxpayers, we are very defensive (understandably so) and very sensitive about our finances.