Beginning July 1, 2014, the prepaid debit card known as the Suze Orman Approved Card won’t function anymore. There was no press release or notification. In June, letters to account holders contained the information.
No explanation for the closure was also provided. The company might have been merely losing money. The card probably did not get widely accepted in the market to become profitable despite a fee structure that was once quite competitive. Numerous ordinary transactions were free, while the Approved card had a $3 purchase price and $3 monthly maintenance fee. When it first came out, the majority of its rivals’ celebrity-endorsed prepaid debit cards had higher fees for both purchase and maintenance (Justin Bieber’s card had a $3.95 monthly fee in addition to different fees for standard transactions, including loading).
Since the introduction of the Approved card, other significant financial institutions have released their own prepaid debit cards.
No refund for a debit
The closing’s apparent inability by Orman to alter the credit scoring mechanism (yet) is its most discouraging feature. She thinks that using a debit card instead of a credit card is a smart financial move and that those who manage their finances without the usage of credit cards are doing the right thing. Unfortunately, the American credit scoring system mandates that people use a variety of credit products in order to maintain a high credit score. Customers that adhere to the cash system therefore have poorer credit scores, which leads to more expensive or missed financing options (for example, a higher interest rate on a mortgage, if the consumer qualifies at all). Orman thinks that these customers are being unfairly punished.
What to do if you possess this card
Bancorp, the company that issued the cards, advises all owners of Approved card accounts to use up the money on their cards, but says that on July 1st, 2014, it will send a refund check to anyone who has a balance.
You can sign this online petition that Orman plans to use to pressure lawmakers to fix the issue if you firmly believe that people who only use the amount available on their debit card should be recognized by the credit scoring system.