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The Western Union Gold Card: The Prepaid Upgrade

Aug. 19, 2011
Credit Cards
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In the world of rewards programs and debit cards, the Western Union Gold Card offers comic relief. NerdWallet isn’t a fan of prepaid debit cards, but if you must have one, the Western Union MoneyWise Card is the way to go. Out of all the prepaid cards out there, the MoneyWise has the most affordable fee plan, though that’s not saying much. Western Union now offers a Gold Card upgrade to their MoneyWise Card, which, if nothing else, is good for a chuckle.

Of course you want to pay our fees

Prepaid debit cards typically don’t offer rewards programs, so this is an interesting case. As it turns out, the Western Union Gold Card is a sad reflection of the pitiful state of prepaid debit cards. On the whole, rewards credit cards have a 1% base rewards rate, meaning you get a penny back for every dollar you spend. The Gold Card offers a dismal .5% rewards rate. But the really tragic (and rather comical) detail is which transactions earn you rewards.

Most legitimate rewards programs allow you to earn points on just about all your purchases—on groceries, gas, entertainment, whatever. With the Gold Card, you can’t earn rewards in any of these categories. You only earn rewards for money spent paying Gold Card fees. Your redemption options are Phone Time, cash back, and, of course, service fee reductions.

The structure of the rewards system is indicative of the absurd amount of fees inherent in prepaid debit cards. The Western Union card charges a $1.00 bank to card transfer fee, a $1.95 ATM withdrawal fee, a $4.95 agent location cash load fee, a $2.50 inactivity fee, a $0.45 balance inquiry fee, and a $0.45 decline fee. At the very least, take comfort in knowing there are plenty of ways to rack up rewards.

So if I spend $1,000 in fees, I’ll get $100 back? I see…

Let’s do some math. To get a $5 reward (whether in Phone Time, cash back, or fee reductions), you need to accumulate 30 points. To get 30 points, you will need to have paid $60 in fees—not money spent on general purchases like food and electronics and movies, but in fees. The highest reward value they offer is $100. That will cost you 500 points, or $1,000. IN FEES! That could pay for 2 years with the American Express Platinum, which gives you thousand upon thousands of dollars in rewards. Or, on the lower end of the credit card spectrum, $1,000 could pay for 16 years with the Orchard Bank credit card for people with bad credit. Why would anyone ever allow themselves to rack up $1,000 in prepaid debit card fees?

There is no defensible reason to need or want the Western Union Gold Card (unless you really like the color of the card, in which case take advantage of the free upgrade). If you earn enough points to actually redeem rewards, you need to drop the card immediately and find a smarter option. Some people turn to prepaid debit cards when they feel they have nowhere else to go. There are always options. If you want rewards, try finding a cash back debit card. If you want a credit card but have limited or no credit, Orchard bank offers both secured and unsecured cards with affordable rates. Go to a local credit union and see what they have to offer. Western Union offers the least offensive prepaid debit card, but its rewards program is a joke.