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Celebratory prepaid debit cards continue to baffle us here at NerdWallet. After the necessary and cathartic collapse of the Kim Kardashian prepaid debit card, we hoped the absurdity had subsided. But not even a year has passed since the Kardashian catastrophe, and Lil Wayne just launched the “Young Money Card,” another toxic piece of plastic capitalizing on financial illiteracy.
Fees, fees, fees
Like any prepaid debit card, the Young Money comes with a mess of fees:
|Domestic ATM WIthdrawal||$2.00|
|International ATM Withdrawal||$3.00|
|Monthly Maintenance Fee||$3.95|
|Card Purchase Fee||$6.95|
|Paper Statement Fee||$2.50|
If for some ungodly reason you decided to sign up for the Young Money Card (perhaps on a bet?), you’ll have to pay the card purchase fee, the reload fee and the monthly maintenance fee no matter what. Those are the inescapable expenditures. Let’s say you sign up and deposit money into your account only twice within the first month. You’re paying a minimum of $20.80 right off the bat! And that’s assuming you don’t need to make a withdrawal or require a paper statement.
The Young Money Card is admirably a little more forthright with the disclosure of its fees than some of the other prepaid cards out there. The terms are easy to find and easy to read; there are no excuses for signing up.
Why do people want prepaid debit cards, anyway?
Prepaid cards target folks with no or bad credit who can’t qualify for most credit cards. Prepaid debit is often seen as a last resort, and many people feel they have no other options. These evil little cards may be appealing in dire straights as they offer an alternative to cash and a means of paying for Internet purchases. However, the fees are always brutal, and there are better options.
If your credit leaves something to be desired, don’t immediately discount credit cards. Not only can you qualify, but you can qualify for a card with halfway decent terms. Our favorite credit card for bad credit comes from Orchard Bank. The Orchard Bank credit card is offered unsecured if you qualify and secured if you don’t. The unsecured version has a $29 introductory annual fee ($59 after that) and a one-time $39 account-processing fee. The secured option has a $0 annual fee ($35 after) and a $200 minimum deposit that is refunded to you when you eventually qualify for a better card and terminate your Orchard account.
Understandably, annual fees can be huge deterrents for potential applicants, but you’ll ultimately save money with Orchard. A Young Money cardholder will pay $47.40 in monthly maintenance fees for a year of use. And if that person makes but one deposit a month, he will fork out $59.40 in reload fees. Without taking into consideration withdrawals, statements or replacements, we’re already at over a hundred bucks for a single year with Lil Wayne.
Alternatively, visit a local credit union. They generally offer fair cards for limited credit as well as checking accounts that won’t come dripping with fees. Prepaid debit cards rely on garish gimmickry and confusing mascots to sucker in the unbanked. Don’t be duped by greed in the guise of goodwill. Despite advertising efforts that may try to convince you otherwise, Lil Wayne isn’t running a charity here. The Young Money card exists for the sole purpose of fattening an already bloated wallet.
And check out this “commercial.” It should be enough to dissuade anyone from signing up.