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American Express Bluebird: The Best Offer Out There?

by on November 8, 2012

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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  • Bridget Lee

    Don’t waste your money. GO to Chase. YOU will be so much happier. I promise you will be happier in the end. I am cutting mine up and heading back to CHASE.

  • Guest

    Bluebird uses pre-authorized checks, which means if you pre-authorize, they debit the money from your account and the check is guaranteed, right? Nope. I pre-authorized a check for my student loan, and BB returned it as unpaid!!! So they debited my account, did not honor their own check, and will not put the money back on my account. They keep telling me they have ‘research’ it, and will get back to me, which they never do. Of course, what can you expect from a company that uses AMERICAN as part of their name, but outsources its customer service to India.

    Do NOT risk using Bluebird. It’s a disaster waiting to happen. I’m out my student loan payment, but have learned the hard way to research reviews before getting another card.

  • Lisa Matousek

    DO NOT GET!!! Not only do you have to send a copy of your ID and SS card to the company but you it takes 7 to 10 business days for your account to be activated, you can use the card only for purchases, no ATM withdraws.

    I was also charged for using the Wal Mart ATM although it is listed on the Website as a money pass location.

    Waste of money and time!

    • Michelle Bazeley

      I was not asked to provide any ID whatsoever. I have a portion of my paycheck direct deposited so I have no fees for any transactions. I even haev 3 sub-accounts for my children at college. It’s been a Godsend to be able to send them money in an instant. Not sure why you’re having issues, sorry it didn’t work for you.

  • Tim Myers

    Lisa you are a liar. Just trying to hurt a great service. I have used bluebird for a few years now best debit card account hands down. Nobody asks for id to set up.

  • Carla Martinez

    NO ACTIVATION FEE, NO CHARGE LOADING MONEY AT ANY WAL-MART MONEY CENTER/CASHIER, NO CHARGE TO USE MONEY PASS ATM’S.( NOT ALL WAL-MART ATM’S ARE MONEY PASS ATM’S SO JUST GO TO THEIR WEBSITE AND SEARCH ATM’S)! DONE!!!!!
    Go straight to the BlueBird wedsite to enroll and avoid all these fees and charges people are posting about and if your SS# is valid you DO NOT have to provide copies of your license and such!
    If you want to pay fees and be interrogated and give up your personal info as well as your drivers license info just walk into any bank and open up their checking accounts! Hell, they even charge you monthly fees, overdraft fees, give you a bundle of limitations and its all free!!!

  • Carla Martinez

    I discovered Bluebird because I was not able to deposit checks into my Paypal account and as a self employed entrepreneur that was a major problem! Now i just take a picture of the check using my app and done, money clears in 5 days. I am willing to wait for the 5 day clearance in exchange of NO FEES, BANKING IN BED WITH COFFEE!, NO MORE TEENAGE SON ASKING FOR MONEY EVERY 5 MINUTES NOW THAT HE HAS A SUB ACCOUNT AND HAS LEARNED THE VALUE OF THE DOLLAR!!!!(warning, once you hand over a sub account card to a teen that has their name on it and a monthly allowance or whatever your plan would be you WILL HAVE a teenager that SUDDENLY realizes the cost of living. This can cause responsibility and an awareness of planning and consequence if funds are not budgeted sensibly which may become a life long habit known as good money management!)

  • Carla Martinez

    One last thing! PRE PAID CARDS!!!! Don’t you just hate that term? There has been a stigma attached to the idea that ‘Pre Payed’ was a lesser option compared to checking accounts and credit cards and for a long time it was the lesser option because the pre payed companies were happy to offer the basic money services with high deposit fees so to many people it didn’t make sense to own one!
    What pre payed really means is CARDS WITH REAL MONEY ON IT OWNED BY PEOPLE WHO ARE NOT LIVING OFF CREDIT OR LOANS OR BEYOND THEIR MEANS BECAUSE THEY CAN’T SPEND WHAT THEY DON’T HAVE! This in America appears to be frowned upon and I for one was tired of not being credit worthy because I hadn’t accumulated dept that I was paying off in a timely manner!
    From what I understand some laws have changed in the banking arena and now checking account features are not just limited to the big boys in banking and lets face it thanks to those guys the pre payed card holder was born and the community of this card holder grew into a population and is still growing at a faster rate than traditional banks care to admit!
    Bluebird in my opinion is at the top of this new era of money management and recognized the growing population of people in need of ways to access THEIR money!
    I have no need for a traditional bank account and looking at the fine mess those institutions contributed to this countries financial mess I would rather be with a company that thinks outside the box or in Bluebirds case flies away from the nest!

  • Terra Knipp

    I have been using Bluebird for a year and the only downfall, other than Amex isn’t accepted everywhere, is their customer service. Its based in India which isn’t the problem, its that everytime I need to call them, I have to wait on hold forever for very simple things. As I type this, I have been on hold off and on for an hour and a half trying to get a replacement card ordered. It so frustrating to waste such time on something so simple. They always say it will be a brief hold of 5 minutes which turns into 30. PLEASE do something to fix this!