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American Express Bluebird: The Best Offer Out There?

by on November 8, 2012

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American Express and Walmart announced today the nationwide launch of the Bluebird prepaid debit card, and it is exactly as momentous as they make it out to be. Whereas traditional prepaid debit cards were characterized by a-la-carte pricing that could easily cost more than a checking account’s monthly fees, the Bluebird offers a way to deposit and access cash without bleeding fees.

How does the Bluebird compare to “old guard” offers?

The Bluebird has a much lighter fee structure than even the more affordable traditional cards:

Card Bluebird Green Dot Card Walmart MoneyCard
In-Store Purchase $5 $4.95 $3
Online Purchase $0
Monthly Fee $0 $5.95* $3*
Cash Reload $0 at Walmart $4.95 with MoneyPak $3 at Walmart
ATM Fee $2.00** $0.00 $0.00
Has ATM network?† Yes – MoneyPass Network

* Waived by loading $1,000+ per month (or, for Green Dot, making 30+ transactions per month)
**Waived with direct deposit
†An ATM network allows the cardholder to avoid surcharges of $2 or more, that are often excluded from cost calculations.

The Bluebird is more affordable than even the new, bank-issued prepaid cards, for those with direct deposit:

Card Bluebird U.S. Bank Convenient Cash Chase Liquid BB&T Money-Account
Activation $5 $3 $0 $0
Monthly Fee $0 $3 $4.95 $5*
Customer Service $0 $2** $0 $2.95***

* Lowered to $3 with $1,000+ load/direct deposit
**First 2 calls per month are free
***$2.95 for in-person call, $0.50 for automated call. First in-person and first automated call per month are free.

Note, however, that the Bluebird is not FDIC-insured: if Amex were to go under, you’d lose your funds.

For dynamic comparisons of the Bluebird and 70 more cards, please visit http://www.nerdwallet.com/prepaid.

Why American Express offers the Bluebird

As NetSpend CEO Dan Henry said in an earnings call, most prepaid cardholders are willing to pay high fees:

I spend a lot of time talking to many of my colleagues in the industry, either be it in the prepaid industry or just in dealings with these low to moderate income consumers…we don’t find a lot of price sensitivity to this product…we have tested free many times…It doesn’t drive incremental volume.

- NetSpend 2Q11 earnings call

But the American Express-Walmart partnership has the possibility to generate revenue beyond simply collecting fees:

  • Cash loads are free at Walmart stores, driving traffic and potentially increasing in-store sales.
  • Walmart provides American Express the opportunity to get in front of a new customer base.
  • American Express earns revenue from interchange fees, assessed on a merchant every time a customer uses plastic.

In the same way that the Chase Liquid, U.S. Bank Conventent Cash and BB&T MoneyAccount cards are able to offer lower fees to attract new customers and draw existing customers away from high-cost checking accounts, American Express and Walmart are able to leverage non-traditional revenue structures to offer a more affordable product.

Dan Henry, CEO of NetSpend: “One of our largest retail distributors today, AGB, charges no reload fee at all. And they do that not, of course, out of the goodness of their heart but based on sound empirical evidence that people go into reload in an AGB spend more than other customers in AGB. And we think it’s inevitable that other like merchants will draw a similar conclusion as they learn more about the product category.” – Netspend 2Q2012 earnings call

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  • Randi

    This card is useless. They claim to accept direct deposit, but what they don’t tell you upfront, they will reject federal direct deposits.
    My social security is in limbo will be for days. Social Security Beneficiaries or Federal workers avoid this card. I am so mad there is nothing for me to do. I went back to my other card which was working better. I thought Bluebird would offer better ways to pay bills, etc. They wont even take my money. This is terrible I am so angry. I need my money and it will take days for me to get it back.

    • Brooke

      It says on the direct deposit page that it does not accept federal or government checks.

      • http://www.facebook.com/dunttt Jon Lewis

        clearly people must not think the fine print should
        be read

      • theoxymoron

        They have now started taking Federal checks. People can calm down about this.

    • http://twitter.com/Themyscira David Matthew

      It’s America, we don’t know how to read. I have had this card for 6 months and love it EVERYTHING is up front and found on the website with a click or 2.

      • miss-miss

        Correct. Read people!

  • http://www.facebook.com/gene.holmes.902 Gene Holmes

    when i first received my blue bird card i was pleased with it, then i opened it and started to use it. several things started to show up as problems. first, if you have a sub account card, they CAN NOT load money on their card, it has to come from your card. i have two teen age kids and was giving them their card for christmas with money on it so they can reuse it and put money on it as they want to, but this is not possible. second, even if you link a bank account to the card (going through a verifying process) your money will still be locked up for 3-5 days. third, i used the check deposit they have for the app and 8 days later my money is still locked up. that is 437.59 that is locked up in limbo for over 5 days. as with other accounts such as paypal, if you verify your bank account to your card you should be able to transfer your money in less then 3-5 days. your pay check SHOULD NOT be locked up for 8 days…..because it does not count on sat, sun, or any holidays. the purpose of having a electronic device, cards, accounts is so that you do not have to deal with live people. in this day and age everything is electronic. why are we still working on the time frame of the 1800 bankers. when i can ever get my money on the cards, i will be closing the accounts and reporting the card to the better business bureau. forth, apon calling customer service, i was “disconnected” three different times when asked why it takes so long when on the page it says 3-5 days, not 8….i then got the click, this is so unprofessional and the worst thing i have ever seen. fifth, why do they say in the recording, “your hold time is longer then expected because of the high demand and everybody wanting the blue bird card”, really, if everyone was good with the card, the wait time would not be 15-20 minutes (no lie, last time i called….22 minutes). this is the worst thing i have ever seen.

    • Unhappy

      I had the same experience. There is is little information on the website – it is practically a blank. No explanation about moving money into sub-accounts manually or holding your money for 8 days or so. I got this for my elderly parents who are subjected to repeated scams, etc. and tend to give out their card numbers. But this has been just a nightmare. As soon as I can I will close this account and find something else.

      • ermahgerd

        @ Unhappy, the website DOES have all the info you stated that it didn’t.
        You just need to look around better and actually read. My husband and I
        have this card and love it. I suspect that many people here didn’t take
        the time to research or even look at the website for info. It’s called being a responsible consumer.

        • Unhappy

          It does NOT have anything on the website that says “Activate card” – I did look several times so your assumption that I didn’t look is completely faulty and arrogant. But I have a feeling that you probably have this tendency toward condescension in general. I’m not sure why you feel the need to be so defensive about this card anyway – if you love it – good for you – the fact that I have not had a good experience with it has nothing to do with you.

          • analyzethis

            It has the instructions taped to the face of the card itself.

          • James

            You must be an idiot

          • analyzethis

            I’m referring to activating the card.

          • analyzethis

            I didn’t have any problem activating or using the card so who is the idiot?

    • analyzethis

      Too bad you didn’t read the terms and conditions re remote check deposit. PayPal does the same thing but both companies detail the wait times in writing.

      • CE

        Good luck finding the terms and conditions.

        • SDB

          Its in the help section, not that hard to find really.

  • jonny frelich

    worst customer service over the phone ever. at least a 15 min hold time each time you call. rude customer service agents. they try tp pass you off or act disinterested in your questions or problems. cancelling my account immediately there are better options out there with way better customer service

  • Unhappy

    Be prepared to stay on the phone for inordinate amounts of time as their website is practically useless. My account was locked and when I called on a Sunday I was told their “customer protection” office is not open on the weekend. This was after a 15 minute wait during which I had to endure a repeated announcement that I could log onto the website! How I wish that were true. I called the next day (cannot directly dial the customer protection unit – so I had to wait another 10 minutes only to be put on hold. At this time I cam waiting it has been 25 minutes. I cannot log onto my account and check my activity or balances and I am stuck in limbo on hold. I will be looking for another alternative as soon as I get out of this interminable wait.

  • http://www.facebook.com/captgriggs Randy Johnson

    Horrible, Horrible, Horrible, do not get this card. They have not cst support. I have had the card for 3 weeks and have had to call in 4 times. Each time is over an hour. This current time is going on 3 hour hold/transfers. There is no online/email support. All I need to do is transfer a few bucks to someone’s account from time to time. I have two debit cards linked which says it right ways, nope usually takes days. Now the account is frozen for some freaking reason and regular cst service cannot answer any question so you need to speak to the “super secret squirrel” person who keeps you hold forever. As soon as I get the card unlocked I am transferring all of the money out and going back to taking my happy butt back to the store for a manually money gram. I feel very sorry for those of you who seriously consider these clowns for your primary money card. They are not even FDIC backed. I was only doing a couple of hundred at a time, I have read that people are actually having things like tax returns and direct deposit sent there. DO NOT do that, trust me. Go to a freaking bank people, it’s not that bad for that kind of stuff.

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  • mswana

    everywhere i have tried to go the card gives a declined message tried paying for gas at the pump it wouldnt let me went inside to give them an exact amount but still did not work. Tried using it a store it wouldnt let me. But when someone steals my card number it works perfectly fine for them???..I called customer service was on hold for 20 mins a lady came and ask questions then said she was transferring me to the dispute department i have now been on hold for 42 mins there is no way in the world this many people are calling bluebird at the same time….

    • James

      You’d be surprised. At all the negative reviews I’m reading everyone who has a card is calling and sitting on hold. Last nite i was on hold with the account protection department for 2.5 hours then at 7 they shut down the phones b/c that’s what time i closed and got a “were closed” message.

  • pete

    Where do I start! Web site is useless. Customer service does not exist other than a recording that tells you to go to the Website. I waited on customer service

    twice for 45 minutes without talking to a human being. If AMEX and WALMART
    rt were not associated and anyone else did the same scam, it would be called fraud.

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