American Express and Walmart Bluebird Prepaid Card Evaluation

bluebird prepaid cardThe launch of the Bluebird Prepaid Card from American Express and Walmart has created quite the buzz in the business community given that American Express – which has traditionally focused on the excellent credit crowd – is going after the sizeable underbanked community and Walmart is progressing toward its longtime goal of offering a suite of banking services to its customers, thereby achieving a measure of vertical integration.

However, most of us are less concerned with the big-picture business ramifications and more interested in whether or not the Bluebird Card will benefit us on a daily basis.  So, let’s see how it stacks up against Card Hub’s picks for the Best Prepaid Cards for each of the three main consumer uses (i.e. alternative checking account, alternative check cashing tool, and a means of providing an allowance), applying the same criteria as our 2012 Prepaid Card Report.

Cost

  • Alternative Checking Account:  The Bluebird Prepaid Card can be free to use as a replacement checking account, as it does not charge fees for activation, monthly or annual maintenance, or ATM withdrawals at 22,000 MoneyPass ATMs nationwide if you are enrolled in direct deposit.  The fact that it also offers online bill pay means it is on par with the GreenDot Gold Prepaid Card, which was Card Hub’s selection for the Best Prepaid Card to Use as a Replacement Checking Account in 2012.
  • Child’s Allowance:  The Bluebird Prepaid Card allows you to load funds for free via a bank account or mobile check deposit, which means parents can give their kids an allowance without wasting money on fees.  However, if you load funds in this manner, each ATM withdrawal that you make will cost $2.  This card could therefore be more expensive than the Kaiku Visa Prepaid Card, which has a $1.95 monthly fee but does not charge for ATM withdrawals at Allpoint’s 43,000 ATMs nationwide.  The Kaiku Card was launched after the 2012 Prepaid Card Report came out but represents a lower-cost option than the study’s choice for the Best Prepaid Card to Use as a Financial Teaching Tool, The Approved Card from Suze Orman.
  • Alternative Check Cashing Tool:  While you can deposit checks for free by taking a picture through an Amex mobile app, you’ll have to pay $2 for each ATM withdrawal when you do not have direct deposit.  Depending on how many times you hit the ATM per month, the Bluebird Card could therefore be either slightly more or less expensive than Chase’s Liquid Card, which has a $4.95 monthly fee and was Card Hub’s choice for the Best Prepaid Card to Use as a Check Cashing Tool.

Based on its cost and basic features, the Bluebird Prepaid Card from Walmart and American Express seems like a great option for most consumers, but it’s also fair to wonder if it offers any other benefits that will sweeten the deal even more.

Pros

  • Mobile Check Deposit:  The ability for consumers to load funds to their cards by taking a picture of a check through Amex’s mobile app was mentioned above, but it bears repeating because it addresses one of the unbanked population’s main needs.
  • No Foreign Exchange Fee:  The fact that you can use this card overseas without incurring additional fees is undoubtedly a big plus, since not everyone may want to open a no foreign transaction fee credit card.  Keep in mind that MoneyPass does not yet have any international ATM locations, which means it might not make the best way to withdraw cash when traveling abroad.
  • Purchase Protection:  If you buy something that breaks accidentally or is stolen within 90 days, American Express will reimburse you up to limits of $1,000 per occurrence and $50,000 per calendar year.
  • Global Assist:  This service gets you access to emergency translation services, referrals to doctors and lawyers, prescription replacements, and aid sending urgent messages home when traveling abroad.
  • Ability to Establish Subaccounts:  Cardholders can establish up to four subaccounts for their Bluebird Cards.  What makes this different from other cards’ ability to designate authorized users is the fact that you can set custom spending limits for each subaccount as well as either enable or disable account features such as ATM access.

Marketing Fluff

A prepaid card’s fees and features are undoubtedly the most important things for consumers to consider, but since issuers tend to distract with “benefits” that provide more surface appeal than actual benefit, it’s also important to point out what you can write off as marketing fluff.

  • Entertainment Access:  Unless you are a hardcore fan of sporting events, concerts, and the like, this common Amex benefit will likely have little practical value to you, especially considering the fact that the tickets and access it provides typically still come at a high price.
  • Roadside Assistance:  You might think that getting help if your car breaks down or runs out of gas would be great, but you are responsible for the cost of all the roadside assistance services that the Bluebird Card facilitates.  Given that you could just as easily call a tow truck, gas station, or locksmith as Bluebird customer service, this doesn’t provide much benefit.

While you should essentially disregard these supposed features, it’s important that you do not overlook the Bluebird’s actual flaws.

Cons

  • ATM Fees:  If you are a heavy ATM user and do not plan to enroll in direct deposit, the fact that each ATM withdrawal will cost you $2 could make the Bluebird Card an expensive choice.
  • No Automatic Loading of Federal Benefits:  Recipients of federal benefits such as Social Security, a federal pension, or VA benefits won’t be able to have them automatically deposited into their Bluebird Prepaid Card accounts. 

Final Verdict

Ultimately, the Bluebird Card brings a lot to the table, including minimal fees and the customer perks that American Express is known for.  In fact, it is the only card on the market that is in the conversation for the best prepaid card for each of the three primary consumer uses.  The only thing that consumers should watch out for is racking up ATM fees if they are not enrolled in direct deposit.  As a result, Card Hub has named it the Best Overall Prepaid Card for 2012.

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