Poverty is Expensive (part 59)
July 7, 2002 9:09 PM   Subscribe

Poverty is Expensive (part 59) The "i-Gen" prepaid MasterCard, available at a Rite-Aid near you, for those who don't have bank accounts (for debit cards) to say the least of credit ratings sufficient to get credit cards. Pay a $10.00 upfront fee, pay another $5 a month plus a "reload" fee of at least $5 every time your card runs down, all for the privilege of letting them hold on to your cash at no interest.
posted by MattD (28 comments total)
 
Heh... You can use it at an ATM. That makes a ton of sense. Pay fees to get card, pay fees to put cash on card, pay fees to get cash out of card...

Maybe it's useful for some sort of money-laundering.
posted by whatnotever at 9:25 PM on July 7, 2002


Actually if you're in real financial trouble(no one will give you a credit card or even a checking account)and want to buy books from Amazon, this is the way to go. You see something you want online; you pay it in; you have it paid out. No hassles; no interference from previous convictions. Makes a lot of sense to me; even if you're paying quite a bit extra.
posted by MiguelCardoso at 9:34 PM on July 7, 2002


If you're in real financial trouble, what are you doing buying books from Amazon?
posted by whatnotever at 9:36 PM on July 7, 2002


*cough*
posted by MiguelCardoso at 9:41 PM on July 7, 2002


The card might be useful for making anonymous payments on the web.

The FAQ says that the card is not anonymous. How much information do you need to give to get a card? Can you make up a name and address when applying?
posted by bravada at 9:42 PM on July 7, 2002


Couldn't someone just open a checking account instead of using this? Almost all banks now provide an ATM card when you open a checking account that doubles as a Visa or Mastercard debit card.
posted by bdk3clash at 9:55 PM on July 7, 2002


bdk3clash, there's usually a minimum balance for bank cards, I think this card doesn't.
posted by hobbes at 10:01 PM on July 7, 2002


Miguel, touche.

bravada, I was wondering about the same thing. They say that they check your info, but how much checking can they do for something you pickup at the checkout next to the bubblegum and lighters? It says "some merchants will ask to see the ID of the cardholder," which implies there are some that don't. I have a feeling there's little more than a law or two keeping one from faking info, and that's not enough to stop most people.
posted by whatnotever at 10:02 PM on July 7, 2002


I would guess that this might be something similar to the 7-11 kiosks being beta-tested. You go into a 7-11 and buy a cash card and then you can purchase stuff from online merchants and have it delivered to your home.

Who might want this? How about a very large illegal immigrant population that is wary of creating too many paper trails? Even many legal immigrants have a bad taste in their mouth from their former local banking institutions and refuse to put money into banks.
posted by billman at 10:02 PM on July 7, 2002


"What if I decide I don't want the Card anymore, can I return it to the store and get my money back?

"No...you may request a liquidation of your account by calling customer service...A liquidation fee will apply."


Fee to join up, fee to stay in, fee to get out.

Sounds like a great moneymaker. Who's interested in a Crash-Card®?
posted by mr_crash_davis at 10:05 PM on July 7, 2002


This makes me wonder about the consequences for purveyors of adult merchandise and services on the web (and over the phone, I guess). Seems like I remember that legally speaking, you can assume someone is of age by the fact that they have a credit card. Anybody know if there is legislation or case law about this?
posted by RylandDotNet at 10:19 PM on July 7, 2002


A checking account is not that hard to get. I've been in the "Holy Shit do not let him near our tellers" level of bad credit before and through a little legwork found a couple banks that would give me an account. Even one with a free ATM/Debit card.

This is as close to a legal scam as you can get. Its up there with the 'payday loan' people. Like I wrote above its not hard getting an account, at least in the US, and I doubt too many people will fall for this unless they make an effort to remain ignorant of banking choices. Not to say that some of these fees don't need regulation.

Miguel, if you need online payment access there are secured credit cards out there whithe much, much lower fees than this card or you can always paypal from your banking account.
posted by skallas at 10:49 PM on July 7, 2002


Visa's gift card has less onerous fees, but it's a similar idea. It looks like you need a credit card to order it. I guess Mastercard is aiming at a slightly different audience with their retail purchases. On the other hand, they're also gouging bastards. There's no way that they can justify that price. (Visa waives the first 6 months of their 2.95 monthly fee, plus the ATM access fee is smaller.)

I want one. I'll eat the ~ 10$ in fees and lost interest for the peace of mind when making random internet purchases. Although even better might be if your CC company would just send you complimentary numbers you could use for a month or so. American express tried this but it apparently didn't work very well.
posted by Wood at 11:03 PM on July 7, 2002


This is one more transitional product on the way to fully digital cash. Of course it's horrendously expensive, but Americans are known to value convenience highly. It's virtually indistinguishable from the calling cards doubling as credit cards and vice-versa.

Hmm: as it happens, the Half-Bakery chewed on this one a year ago.
posted by dhartung at 11:47 PM on July 7, 2002


Skallas, paypal is not as widely accepted as you might think and there are occasions when you either pay via credit card or buy in person, which can be difficult if you live in a different country. ATM cards cannot be used via the net or by phone.

Despite the high fees (and what banking service doesn't include those), this card could be a way of avoiding giving out your "real" credit card numbers via net or phone shopping and limit possible losses through fraud.
posted by dg at 11:53 PM on July 7, 2002


dg, I'm not saying paypal is the answer, but it is an option for some/most on-line transactions.

High fees? This card is absurd. At least with most banks their debit/atm cards can be used freely at their own ATMs and if you have a debit card you don't need this to begin with.

As far as security goes. Its still not worth it. Discover and other card companies offer one-time CC numbers for the paranoid.
posted by skallas at 12:05 AM on July 8, 2002


What I like, is my Starbucks card!
posted by dagny at 2:52 AM on July 8, 2002


This is simply a viable, if pricey, option for people who might not have any/many other options. Nobody is forced to get one. As pointed out above, there are certain groups who may benefit from this, if only for the sake of convenience or (relative) anonymity.
posted by davidmsc at 3:36 AM on July 8, 2002


> This is simply a viable, if pricey, option for people who
> might not have any/many other options.

So is loansharking. Or maybe it is loansharking.
posted by pracowity at 4:38 AM on July 8, 2002


From the FAQ: "
Anyone at any age can buy and use this MasterCard card. However, for those underage, a parent or legal guardian must be on the phone during the account activation process . . ."


Oh my, the things my friends and I could have done with that at age 16.
posted by jeremias at 5:53 AM on July 8, 2002


Or maybe it is loansharking.

Well, not quite: it's closer to the upmarket pawn shops that cash cheques and take a big cut. Obviously MasterCard saw that market as one worth cutting in upon. I'd sooner see an expansion of credit unions, which do the job of providing banking facilities to the less well-off in a way that's rather less exploitative of such people's lack of options.
posted by riviera at 6:32 AM on July 8, 2002


skallas, I envy you if you can get a debit card without paying monthly fees or transaction fees. Perhaps the situation where you are is different, but here I would expect to pay around $5.00 - $10.00 per month just for the privilege of having a bank account and I may get 10 or 15 free transactions per month. After that, I could pay up to $2.00 or more per transaction. This all adds up pretty quickly and, when you add the government's cut, the cost just to put my money somewhere for the 5 minutes that I actually get to keep it before paying my bills with it (some of them, at least) can be pretty high. Makes $5 per month seem not too bad.
posted by dg at 7:27 AM on July 8, 2002


yeah, like those payday advance stores, but there are some similarities with predatory lending, esp wrt exploiting asymmetric information in a given demographic:
"If one is a market optimist and believes that both lenders and borrowers are rational and well-informed, then subprime credit markets with proper rate differentials will open up. If one is a market pessimist and believes that borrowers are not well-informed and may not be fully rational, then some lenders will have opportunities to exploit these borrowers with predatory practices."
and i'd even say structural imbalances akin to "company towns" whereby any money transfers are subject to high fees because the infrastructure of exchange is dominated by corporate interests (altho competition seems to be lowering margins :)

but yeah, what's sorta fascinating is the private currency aspect of it. corporate scrip, esp in the digital era, could challenge government purview over the money apparatus! challenging corporate scrip, (ideally :) could be a more sophisticated form of credit union: mutual credit facilities!
posted by kliuless at 7:34 AM on July 8, 2002


skallas, I envy you if you can get a debit card without paying monthly fees or transaction fees.

Come to Britain and envy us all. (Free banking, interest on current accounts if you're in credit, interest-free overdrafts if you're paying in a regular wage.) Australian banking sounds like what it was like over here 40 years ago.
posted by riviera at 8:24 AM on July 8, 2002


I would love a pre-paid card to supplement my credit card and bank card. Reason: I take a lot of taxis, and am always a little wary of giving my credit card to the drivers, just personal anxiety I guess, about where my number might end up. If I had a pre-paid card, less chance of problems.
posted by benjh at 9:26 AM on July 8, 2002


kind of like the octopus card! like i think it'd be a good idea if more city/municipal transportation systems offered such expanded service :)
posted by kliuless at 9:45 AM on July 8, 2002


You can get free banking, free credit cards, free debit cards, and free deposits and withdrawals. You just have to be willing to look.

www.citizensbank.ca for starters. Your local credit union would be another place.
posted by five fresh fish at 8:50 PM on July 8, 2002


> You can get free banking, free credit cards, free debit
> cards, and free deposits and withdrawals. You just
> have to be willing to look.
>
> www.citizensbank.ca for starters.

That may be true, but many of those who need such things most are people with low literacy, little free time, no knowledge of and little access to the Internet, etc. What they know of this is what they see on big signs paid for by the companies making most from people like them.
posted by pracowity at 10:32 PM on July 8, 2002


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