The Approved Card from Suze Orman Shuts Down – Credit Sesame

The Approved Card from Suze Orman, a prepaid debit card, will no longer act as of July 1, 2021. There was no announcement or pr release. The information showed up in letters to customers in June.

Nor was any reason given for the shutdown. It may happen to be that the business was simply taking a loss. Despite a charge structure that was once very competitive, the card probably did not gain wide enough acceptance out to become profitable. The Approved card cost $3 to buy and $3 monthly to keep, and many regular transactions were free. If this launched, most competitors’ celebrity-endorsed prepaid an atm card charged higher fees both to purchase (the Kardashian card famously cost $100) and to maintain (Justin Bieber’s card came with a $3.95 monthly fee plus various fees for basic transactions, including loads).

In time since the Approved card premiered, several big financial institutions put their own prepaid an atm card on the market.

No credit for debit

The most disappointing part of the closure is Orman’s apparent failure to effect any change (yet) towards the credit scoring model. Her belief is that consumers who avoid debt are doing the right thing by managing their finances without charge cards; that choosing to make use of a debit card over a credit card is really a wise financial decision. Unfortunately, the loan scoring system within the U.S. requires customers to have and employ various kinds of credit products in order to develop a strong credit rating. So consumers who have confidence in a cash system have lower scores which lead to more costly or lost financing opportunities (for instance, a higher rate of interest on a mortgage, when the consumer qualifies whatsoever). Orman believes these consumers are being wrongfully penalized.

[Related Story: Should Prepaid Cards Be Reported On Credit history? ]

What you want to do for those who have this card

Bancorp, the financial institution that issued them, encourages all Approved card customers to invest down the funds on their own cards, but promises to issue reimbursement check to anyone with a balance on July 1st, 2021.

If you think strongly in Orman’s philosophy that people who only spend the total amount available on their debit card should be recognized by the credit scoring system, you can sign this online petition that Orman wishes to use to push lawmakers to address the issue.

More on Prepaid Debit Cards:

The Prepaid credit card Mine Field

Prepaid An atm card: And You Thought Bank of America's $5 Debit Card Fee Was Bad

5 Reasons Why credit cards Is Better Than Cash or Debit Cards

Easy Ways to Build Credit Without Using Credit Cards