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Bankrate.com Senior Financial Analyst Greg McBride on the problems with Suze Orman’s prepaid debit card.
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-- -- approved prepaid debit card continues.
On yesterday shows -- credit dot com's John Alzheimer called for the celebrity financial guru to cancel -- card.
Which is riddled with -- is -- big question is will -- We reach out to Bancorp the company that issued the card they have not returned our phone calls or respond to our emails.
Greg McBride here.
My -- he's a senior financial analyst for Bankrate dot com Greg but who -- the show it to see you.
Tell me certain what do you think about this idea of using a debit card.
To establish credit cannot work.
I mean I think it's a real reach -- you know we've got about 25% of households Jerry that are either on banks or under -- There are a lot of people in the financial services community that are trying to current cracked the code -- of how do we.
-- assigned some great of credit worthiness to people that act don't actually have credit trade lines and so.
What she's doing is really not unique in that sense everybody's trying to do that.
But this idea that this prepaid card is gonna somehow help you establish some sort of credit history your credit rating.
How exactly they're gonna do that if they're gonna be able to do that is very vague and it sounds a lot to me like what you know what let's just collect the whole bought whole lot of data will see we come up what.
Well yes I mean think about it logically.
-- you know what am -- gonna get points -- -- what's gonna help me with -- -- the pet store and spend my money on my prepaid debit card or go to the gracious -- restore.
There's really just no way of analyzing.
Where people spend money in what it means for how credit -- -- Abu -- I tender -- and I ended again I mean this is.
That's throws the -- this year on year and it's here is that this is -- prepaid card you have put money on it first and then you're buying stuff later.
This is not somebody send you a bill in the mail and then you pay it frank which you know again if you're going to resort to.
Traditional bills of people pay every month the car up with some sort of credit rating.
-- use that system of you the cable company the phone company the people are annual bill how good is the consumer lending and.
You mentioned how you get this card I want to talk about that for just a second because.
-- we look at getting a card testing announcing what it was like we noticed that when you go through that process what you find out if you've got to have a credit card to get -- card.
Now this just can -- me if I had a credit card I wouldn't need to prepaid debit card.
Sounding a bit of a catch 22 now that you're back up forty that.
I you know it's it -- you're right the irony is is this got a funny in the sense that prepaid cards traditionally are marketed toward consumers to that.
Don't have traditional banking relationships don't have credit can't get credit don't want credit.
Or don't have traditional checking accounts and that's the other thing is that even -- Well let's and other prepaid cards this -- -- price rather competitively.
For most consumers it's still pails in comparison to what a low cost or free checking account of -- small community bank credit union -- online bank.
Has offers are most consumers.
A -- even a traditional banking -- is going to be a much better option.
Much better deal much better deal financially that's for sure you know last night got alzheimer's told may.
She really needs to pull this card and -- -- consider Susie.
She's a well known people trust her she's -- a lot of folks a lot of good advice shouldn't she just pull this card.
Well -- I I'll I'll leave that up to have power to decide -- Dahlia when you look at the track record.
The car -- -- withdrew from their card quicker than they withdraw from marriage.
-- Deutsche -- is something grand there could hurt and I you know -- half a relative to that effect are well.
Fact get slapped a wait and see it but we're asking questions about it and that trying to get to the bottom right -- -- itching but this thing out.
-- thanks for coming on how lucky ideology honestly Jerry I think like a lot you know whether it's the car dash in Suzie Orman.
Russell Simmons -- -- confess I don't in -- that is.
An easy I think like most red blooded Americans when somebody comes -- and says hey I got an idea that's gonna put a lot of money in your pocket.
We're all for itself idiotic like a lot of people are just kind of looking out for that next -- are well I SF but some but not I think -- Eric will be.
