bank rates

RushCard’s Rewards Can’t Mask High Fees

You'll get stuck with fees with the RushCard.The RushCard, one of the worst prepaid cards on the market, has announced a new savings tool and cash-back rewards program that it says “helps hard-working members who want to budget and save but are finding it difficult to do so with the big banks.”

Don’t be fooled. The card is still a bad deal for consumers and should be avoided.

The new feature, called RushGoals, encourages you to set up Goals savings accounts.

For each month you maintain an average daily balance of $500 or more across your Goals accounts, RushCard will reward you with a $2 credit that will be applied against your monthly fees, $24 a year if you maintain that balance for a full year.

“With RushGoals, we not only give customers money back, we’ll also help them realize their financial goals,” RushCard founder Russell Simmons said. “This is just one of the ways RushCard continues to look beyond traditional prepaid card programs to create more tools to improve the overall financial well-being of our members.”

Of course, what Simmons fails to mention is the enormous fees he charges his customers and that the $2 reward — should you earn it — puts only a minor dent in them.

There’s a $9.95 monthly fee ($120 a year) and a minimum $3.95 onetime activation fee ($14.95 if you want the Baby Phat RushCard design). You can get a pay-as-you-go plan with no monthly fee, but that charges $1 every time you use your card at the checkout, up to $10 per month.

Online bill payment costs $2 to enroll, then $1 each time you pay a bill. You get two free ATM transactions a month, but subsequent ones cost $2.50 each, plus whatever fee the ATM operator charges.

There are plenty of other fees, depending upon what you do or don’t do, such as the $3.95 card replacement fee — an additional $30 if you want expedited delivery.

The RushCard also purports to build your credit history through the free RushPath to Credit program, in which all your payments from using online bill pay are sent to PRBC, a credit reporting agency.

However, as the RushCard website admits — in tiny, faded typeface that is very hard to read — the program won’t help your credit if the lender doesn’t consider PRBC as a credit bureau, which many lenders don’t.

In short, despite the hype, the new RushCard features are just a lame attempt to dress up an ugly product.

If you want a prepaid card, there are plenty of reasonably priced alternatives that don’t rip you off like the RushCard does. Among the winners: the AmEx prepaid card, the Walmart MoneyCard and the Mango MasterCard Prepaid Card, which also pays interest if you deposit money into a separate savings account via direct deposit. Its current promotional rate is 6% APY on balances of $5,000 or less.

There are also thousands of small banks and credit unions that charge no or minimal fees on savings and checking accounts.

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Comments (2)
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2 Existing Comments
  1. LaToya Irby said:
    on January 11th at 12:15 am

    Sounds like new features are intended to make the RushCard more competitive with Suze Orman’s new Approved Card.

  2. Mike Cetera said:
    on January 11th at 08:48 am

    LaToya: We thought the same thing. Look out for our take on Orman’s new card later this week.