Walmart and American Express caused quite a stir on Monday when they announced the launch of their new joint venture: the Bluebird prepaid debit card. Though past prepaid cards have been known for high hidden fees, the companies insist that the only fee consumers will be paying with the Bluebird card is a $2 ATM withdrawal charge (that’s waved if it’s the first withdrawal of the month, or if it’s from any of the 22,000 MoneyPass ATMs around the country).
The card also offers a host of features that have never been seen before on the prepaid card market. For example, international travelers will enjoy the lack of foreign transaction fees and the Global Assist program will help provide solutions to problems, such as medical or legal issues, encountered abroad. Having purchase protection for items that break or are stolen within 90 days could also come in handy for users.
Added features are its accompanying mobile app and the option for cardholders to establish subaccounts. By taking a picture of a check through a smartphone application, users will be able to load funds automatically and for free. And the subaccounts will have customizable spending limits and account features for up to four authorized users, so parents will be able to give allowances to multiple children.
Similar cards on the market include GreenDot’s prepaid card and Walmart’s MoneyCard, but both carry monthly fees. Since the card’s Monday launch, GreenDot’s stock price has fallen nearly 25 percent. Unfortunately for GreenDot, whose shares had already depreciated by 60 percent in a single day back in July following an earnings projection adjustment, this offer will also serve as a blueprint for the other major financial companies looking to enter the market.
The takeaway: It’s a great option (possibly one of the best) for consumers who use prepaid cards, and for those who are fed up with the fees charged by their checking account, or need a check cashing alternative. And it might not be too long before the free prepaid card assumes the role previously held by the free checking account.
Odysseas Papadimitriou, a former Capital One senior director, is the CEO of the credit card comparison website Card Hub and Wallet Hub, the first personal finance social network.