Yes…they have all jumped into the prolific market which targets working class and low income families promising to give them all the luxurious privilege of spending money to use their own money. BET has joined the ranks of those who expect people spend their money using a “glorified gift card” as they are called by John Ulzheimer, President of Consumer Education at SmartCredit.com.
The prepaid card is one that doesn’t help anyone establish credit, costs far too much for those who have limited budgets, and, because they allow those who use them to remain outside the banking system, too often insert the user into a permanent underclass of society, unable to progress economically.
BET has partnered with NetSpend (NTSP) to endorse their Control Card that promotes the following perks.
No credit check
No overdraft or other surprise fees
No interest or late fees
No standing in line to pay bills
A $10 Purchase Cushion
A 5 percent APY Savings Account
That sounds pretty good to the naked eye, but as I have done with many prepaid cards before, let’s take a look at each “perk” to see if they are really benefits.
No credit check: This is a prepaid debit card which is the same as using cash. You will never have a credit check to use your cash so you will never have a credit check to use a prepaid debit card.
No overdraft or other surprise fees: I wouldn’t know about that because I couldn’t see what all the fees were unless I purchased the card…surprise! To see a complete list of the fees I could find, see the end of this article.
No interest or late fees: These cards are not extending you a line of credit. Hence, they are not helping you establish credit. Therefore, there is no need to charge you an interest rate or charge a late fee since you are only using your own money and not borrowing any money.
No standing in line to pay bills: Is this any different from any other free form of online payment?
A $10 purchase cushion: If you take the time to read the fine print in this “perk” they make it very clear this is a “non-contractual courtesy exercised in our sole discretion, by which we may approve transactions that the Control Card cardholder requests from time to time.” Translation — they are under no obligation to give you this cushion if they choose not to, so if any user finds themselves having to use this cushion frequently, they can deny you!
A 5 percent APY savings account: To have access to this feature, you must have deposited at least $500 in one calendar month. This seems like a high interest rate until you remember you are being charged at least 10 percent monthly on a deposit of $500 just to earn 5 percentyearly. That doesn’t make much sense, and is a great deal for the bank. By the way, if you are one of those who had the brilliant idea of putting a large sum of money into this account and using it as a high yield savings account just to get access to the 5 percent return that is offered, there is a clause in the fine print that states “a cap may be placed on the maximum amount of funds on maintained in the account.”
It also states the cap can change, which means in no uncertain terms, in my opinion, would they allow someone to put an excessive amount of funds into the account to earn an exorbitant amount of interest on their funds. I am sure they are not too concerned about having to implement this cap because those who use these types of cards are typically in the low income category; however, this clause hidden in the fine print I am sure was inserted to protect their interests.