If you've been keeping up with the latest entertainment buzz you've probably heard about the Kardashian sisters' newest and now defunct business venture - a prepaid debit card designed to leverage the influence they've gained from their hit cable TV show "Keeping Up With The Kardashians." The show targets young people, which was also the target of the prepaid debit card. But unfortunately for the youth who bought the card, "keeping up with the Kardashians" was comparable to highway robbery.
Just to buy the card and use it costs $59.95 for six months, or $99.95 for 12 months. That does not include any money on the card. The person buying the card must add money onto it.
The initial feels were just the start. After those six or 12 months are up, it costs $7.95 a month to keep using the card. Users have to pay $1.50 to withdraw cash from an ATM, and $1 to check their balance. Talking to a customer representative on the phone costs $1.50 for each call, and canceling the card costs $6.
The Connecticut Attorney General called the rates on this prepaid debit card predatory and has vowed to investigate further. However the debut of this celebrity branded prepaid debit card could be giving us an indication of what the future holds. With the passing of the Credit Card Act, credit card companies face restrictions on how much they can charge credit card consumers. However, those restrictions do not apply to debit cards. If you look at the costs on this prepaid debit card, it would really take a leap of imagination to compare it to the debit cards that come with a real bank account.
With prepaid debit cards such as the Kardashian card, banks have effectively figured out a way to get around the Credit Card Act and instead of charging consumers steep fees on borrowed money, they charge them outrageous fees on their own money. You can be guaranteed we won't see the last of these types of prepaid debit cards.