Amex Bluebird Offers Check-Writing, FDIC Insurance. It's a BFD. [Updated] - NerdWallet
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Amex Bluebird Offers Check-Writing, FDIC Insurance. It’s a BFD. [Updated]

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The Bluebird just got better: American Express and Walmart just announced a series of changes to make the prepaid card more versatile, safer and more checking-account-like.

Update May 29th, 2013: The Bluebird just announced that it will cut down the monthly maximum for checking or savings account loads from $10,000 to $2,000. For those of us who use the Bluebird in only limited circumstances, like making a rent deposit with a pre-approved check or taking advantage of its no foreign transaction fees for international travel, this is mildly annoying. We tend to like the Bluebird for large, infrequent purchases like those described above, and this means you’ll have to write yourself a check from your deposit account to add more than $2k a month.

The Bluebird’s new features include:

  • Accounts are now FDIC-insured, removing one of the biggest Bluebird drawbacks
    • As a result, you can now deposit government benefits (such as Social Security, military and tax refund payments)
  • Annual card load limit raised to $100,000
  • You can now write pre-authorized checks against Bluebird funds
    • All Bluebird cardholders can get one free checkbook until August; after that, a checkbook is free for direct deposit cardholders and $26 for non-direct deposit cardholders.

What does this mean for consumers? It means that the Bluebird might just be the future of banking.

“No overdraft” checks

A key component of the Bluebird’s new features is writing checks against the balance on the card. This normally flies in the face of prepaid cards’ no-overdraft policy: Depending on when the recipient cashes the check, you may end up overdrawing your account.

The Bluebird card’s method is different, though. You get a unique authorization code online or on the Bluebird mobile app, and the funds are immediately deducted from your account. You then write the code on your check, hand it over to the payee, and go on your merry knowing that you have the funds to cover the check. It increases flexibility while still protecting you from overdraft fees.

It’s everything you liked about checking

For a very specific user, the Bluebird can be just as good as a checking account – or better, if they have a tendency to overdraw. You can add cash for free at Walmart – a feature you’ll find on very few prepaid cards – and you can avoid ATM surcharges at MoneyPass’ 20k+ ATMs. (There’s a $2 ATM withdrawal fee, waived if you use direct deposit). If you insist on prepaid, and use direct deposit, you can basically use the card fee-free. If you don’t use direct deposit, depending on your ATM habits, you might be better off with a card that has a low monthly fee and no cash load or ATM fees.

The Bluebird’s fulfill the needs of serial overdrafters, who eschew checking accounts because they tend to incur insufficient funds fees. Now, such a person can write checks, deposit cash, send mobile payments and have FDIC insurance without paying through the nose for the privilege. Banks used to get a substantial portion of their checking revenue from overdraft fees; the Bluebird challenges both that model and the bleed-’em-dry model of traditional prepaid debit cards.

The downsides of the Bluebird

The Bluebird is not, however, the second coming. Main reason: the name – American Express isn’t as widely accepted as Visa or MasterCard. Also, you can’t get cash back at your grocery store, so there’s no way to get cash fee-free if you don’t use direct deposit. But aside from that, it’s an excellent supplement to other financial products.

Why I have an Amex Bluebird

NerdWallet’s reserved some of its harshest words for prepaid debit cards – $1 per transaction? $10 just to purchase the card? No thank you. But with these new offers that have all the capabilities of a modern major checking account, certain prepaid cards do deserve consideration among the banked and unbanked alike. Here’s why I carry a Bluebird in my wallet:

  • Mobile check deposit. My credit union – bless its not-for-profit heart – doesn’t offer mobile check deposit, and the Bluebird’s app is a convenient way to deal with checks.
  • No foreign transaction fee. My credit card – the Chase Freedom – carries a foreign transaction fee, so I used my Bluebird card in Canada to avoid getting gouged 3% of every single dollar I spent across the border. Debit cards with no foreign transaction fee are fairly hard to come by, so the Bluebird is a good alternative if you’re traveling to an Amex-friendly country.
  • Buying off of Craigslist. I’m particularly excited about the pre-authorized check feature, because it makes large transactions on Craigslist and similar sites all that much easier. A payee can call American Express to verify that a check is pre-authorized and will clear, so instead of paying $5,000 in a stack of $20’s, you can just hand over a check.

The new features of the Bluebird make it all the more attractive, not just for the unbanked, but for those who have credit or debit cards and just want a lil’ extra.

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  • Greg Lee

    When I saw AmEx had added FDIC Pass-Through to the Bluebird card my first thought was what will all the naysayers find wrong with this product now?

    The services Bluebird is providing is something banks and other prepaid cards (i.e. Rushcard) could have done long ago. They chose to simply milk a customer out off every nickle they could find in their pocket (fees & more fees to use & spend your own money, no less!).

    Bluebird is now definitely an alternative to a traditional checking account and it’s also a great supplement to a checking account. I’ve been using my Bluebird card as a method of making cash deposit into my online bank which doesn’t accept cash deposits directly. I just hope Bluebird generates more competition in this space. I would like to see a low/no fee Visa/MC version of Bluebird.

    Also the way AmEx implemented check writing is great. I never liked using paper check because they do contain a lot of personal information on them. But with BB the check is no good without the authorization number on it… which can be verified by the payee before accepting it. Now AmEx and Walmart need to educate the consumers on the potential benefits of using BB and it’s features.

  • Greg Lee

    When I saw AmEx had added FDIC Pass-Through to the Bluebird card my first thought was what will all the naysayers find wrong with this product now?

    The services Bluebird is providing is something banks and other prepaid cards (i.e. Rushcard) could have done long ago. They chose to simply milk a customer out off every nickle they could find in their pocket (fees & more fees to use & spend your own money, no less!).

    Bluebird is now definitely an alternative to a traditional checking account and it’s also a great supplement to a checking account. I’ve been using my Bluebird card as a method of making cash deposit into my online bank which doesn’t accept cash deposits directly. I just hope Bluebird generates more competition in this space. I would like to see a low/no fee Visa/MC version of Bluebird.

    Also the way AmEx implemented check writing is great. I never liked using paper check because they do contain a lot of personal information on them. But with BB the check is no good without the authorization number on it… which can be verified by the payee before accepting it. Now AmEx and Walmart need to educate the consumers on the potential benefits of using BB and it’s features.

  • http://www.kgaction.com/ Mark Miller

    I’m going to seriously consider getting a Bluebird card now that I have read this post. The advantages seem undeniable, and you don’t have to use the card for all your transactions, only the ones that will benefit you. I like it. I like it alot!

  • http://www.kgaction.com/ Mark Miller

    I’m going to seriously consider getting a Bluebird card now that I have read this post. The advantages seem undeniable, and you don’t have to use the card for all your transactions, only the ones that will benefit you. I like it. I like it alot!

  • jb

    I got my blue bird card when they first came out and I love it im so glad they came out with checks and I love the fact you cant over draw.

  • jb

    I got my blue bird card when they first came out and I love it im so glad they came out with checks and I love the fact you cant over draw.

  • analyzethis

    MoneyNetwork, the prepaid card from FirstData, has had this type of check with an approval number for years now. That’s the card used by Walmart for their own employees.

    They’ve addressed the FDIC issue. When customer service moves to an English as a first language part of the world the only disadvantage will be not being universally accepted.

    Maybe Walmart at that point will use this for their employees instead of the MoneyNetwork.

  • analyzethis

    MoneyNetwork, the prepaid card from FirstData, has had this type of check with an approval number for years now. That’s the card used by Walmart for their own employees.

    They’ve addressed the FDIC issue. When customer service moves to an English as a first language part of the world the only disadvantage will be not being universally accepted.

    Maybe Walmart at that point will use this for their employees instead of the MoneyNetwork.

  • http://www.nonmedcanada.ca/ Life insurance without medical

    I like it.FDIC-insured, removing one of the biggest Bluebird drawback.It’s an excellent supplement to other financial products.

  • http://www.nonmedcanada.ca/ Robert J Hardy

    I like it.FDIC-insured, removing one of the biggest Bluebird drawback.It’s an excellent supplement to other financial products.

  • http://www.facebook.com/laurie.yammine Laurie Mullen Yammine

    My main reason for getting a Bluebird card was to utilize the sub account features for my 13 and 16 year old sons. I liked that I can load the card fee-free at Walmart with instant access to the money. The entire amount goes onto my “main” card, and then I move it around to their sub-accounts instantly online. I use this feature to transfer their allowances to the card. It is also safer than sending cash with them on school and scout trips. They had another American Express prepaid card prior to this, but in order to get fee-free loading, you had to do it online from a bank account and it took almost a week for the money to show up. You can set up texts / emails also so I see instantly where they are purchasing, which is also another safety check in case they lose it. I would most likely catch a charge immediately that is not legit , based on knowing where they are and what they are doing.

  • http://www.facebook.com/laurie.yammine Laurie Mullen Yammine

    My main reason for getting a Bluebird card was to utilize the sub account features for my 13 and 16 year old sons. I liked that I can load the card fee-free at Walmart with instant access to the money. The entire amount goes onto my “main” card, and then I move it around to their sub-accounts instantly online. I use this feature to transfer their allowances to the card. It is also safer than sending cash with them on school and scout trips. They had another American Express prepaid card prior to this, but in order to get fee-free loading, you had to do it online from a bank account and it took almost a week for the money to show up. You can set up texts / emails also so I see instantly where they are purchasing, which is also another safety check in case they lose it. I would most likely catch a charge immediately that is not legit , based on knowing where they are and what they are doing.

  • Grace Raulerson

    Closing my Bluebird card, they will place hold on funds and will take 8 days to release. this has happened twice now and they hold over $100 dollars. The first time was for a purchase of $12.76 and the 2nd time for $100.00. I called customer service and was told even though it took seconds for $ to be taken from acct takes up to 8 days to release, this is not acceptable for me.

  • Grace Raulerson

    Closing my Bluebird card, they will place hold on funds and will take 8 days to release. this has happened twice now and they hold over $100 dollars. The first time was for a purchase of $12.76 and the 2nd time for $100.00. I called customer service and was told even though it took seconds for $ to be taken from acct takes up to 8 days to release, this is not acceptable for me.

  • Ed

    I have a Bluebird account as well. I do love it. But I kind feel like I wonder why I have to wait for my money to be available 3-5 business days if I use my savings as a funding source. I also wish they would give you the option to use the card as a debit where you have to enter a pin. If it is really your alternative to debit, why is it they have you use it as credit for all purchases? Although, I have thought about going back with it.

  • Ed

    I have a Bluebird account as well. I do love it. But I kind feel like I wonder why I have to wait for my money to be available 3-5 business days if I use my savings as a funding source. I also wish they would give you the option to use the card as a debit where you have to enter a pin. If it is really your alternative to debit, why is it they have you use it as credit for all purchases? Although, I have thought about going back with it.

  • picklittle

    I don’t generally leave bad reviews by Bluebird deserves it! Every check I “pre-authorized” was declined by the bank, a third of the merchants I went to didn’t take American Express, a third had the card decline, and the other third probably didn’t deserve my patronage anyway. After my rent check was declined I went to withdraw it from an ATM so I could buy a money order. Although the card says can withdraw $1000 a day from the ATM, I can’t. I could only get $500, so I had to go back the next day and get the rest of it. At time, I just put the rest on my Walmart card and called it good. Oh, and changed my direct deposit back to my Walmart card. Seriously? I mean, for real, seriously?

  • picklittle

    I don’t generally leave bad reviews by Bluebird deserves it! Every check I “pre-authorized” was declined by the bank, a third of the merchants I went to didn’t take American Express, a third had the card decline, and the other third probably didn’t deserve my patronage anyway. After my rent check was declined I went to withdraw it from an ATM so I could buy a money order. Although the card says can withdraw $1000 a day from the ATM, I can’t. I could only get $500, so I had to go back the next day and get the rest of it. At time, I just put the rest on my Walmart card and called it good. Oh, and changed my direct deposit back to my Walmart card. Seriously? I mean, for real, seriously?