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Foul! Bench Magic Johnson’s Prepaid Card

After leading the investment group that recently bought the Los Angeles Dodgers for $1 billion, what does basketball legend Magic Johnson do for an encore?

He did what other celebrities do — created his own prepaid debit card.

Magic should stick to sports.

We can’t offer a slam-dunk endorsement of this card. While it’s not the blatant ripoff that the RushCard and the now-defunct Kardashian cards are, it’s hardly the least-expensive card on the market — far from it.

Here’s a look at the details of the Magic card:

Onetime Setup Fee $4.95.
Monthly Fee $4.95
ATM Withdrawal Fees
Free at in-network machines; $2.50 at out-of-network machines (first two per month are free); 50 cents for balance inquiries.
Other features Free direct deposit plus $10 sign-up bonus; free cash back at retail stores. FDIC insurance.
Verdict Not the highest-priced card on the market, but far from the cheapest.

After the $4.95 onetime setup fee, the Magic card carries a stiff $4.95 monthly fee, which you can’t avoid. So you’re out more than $60 the first year.

While that’s not nearly as bad as the RushCard, which costs more than $120 a year, it’s a lot more expensive than Suze Orman’s prepaid card (you know, the card that was hugely controversial), which charges $3 a month.

Other popular cards charge a lot less. Walmart charges $3 a month for its prepaid card, but you can avoid that fee if you direct deposit at least $1,000 a month to your card. Capital One’s prepaid card is free when you load at least $500 to the card in any month.

We should also point out that Johnson is getting some criticism for marketing a product with high fees to the low-income African-American communities he pledged to help with his other business ventures.

In a scathing piece on Huffington Post headlined “Shame on You, Magic Johnson,” journalist Dion Rabouin writes of the problem of “celebrities and tastemakers in black popular culture who would rather make a quick buck manipulating our people’s ignorance than try to help.”

Ouch.

Rabouin’s advice: If you don’t think you qualify for a free checking account, you’re wrong. Go find one.

Of course, the Magic card’s website says that if you use the card “the right way, you can avoid almost all fees other than the onetime setup fee and the monthly fees.”

But those monthly fees are pretty stiff.

As other prepaid cards go, though, the Magic card doesn’t load you up on other fees.

Direct deposit is free. You even get a $10 bonus when you sign up for it.

It’s also free to add money online from a bank account.

You can also get cash at retail stores for free if you ask for cash-back at the register.

There are no ATM withdrawal fees if you use an in-network machine, and the first two ATM withdrawals per month are free at out-of-network machines ($2.50 each after that). Remember, though, that the ATM operator may charge its own fees.

The Magic card does charge $2 each time you call live customer service, although the first call each month is free.

You can load up to $10,000 each month on the card and up to $5,000 in one day. You can spend up to $1,500 per day. ATM withdrawals and cash-back at retail stores are limited to $500 per transaction.

Bottom line: If you’re in the market for a prepaid debit card, look elsewhere.

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