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-- have been high priced they've been marketed to sub prime borrowers people that is without a lot of money.
In focus tonight we're talking about prepaid debit cards now a -- -- card issuers are marketing these consumer traps -- the wealthy.
Here to break it down John Alzheimer consumer education credit president for Smart credit dot com.
John welcome back to the show.
Why you sell these two really wealthy people.
Well it's a segment of the market.
That has been relatively untapped for prepaid debit cards so essentially what they're giving us are going from the -- -- Anchor on her bank.
-- to be less sophisticated and now -- last.
You know the last piece hiding under the -- is the more fluent in Saudi consumer and it makes -- -- -- more money.
Well now here's the dirty little secret Americans love these things but not for any good reason that I can find.
I guess if you're really wealthy and you want to pay all those -- you can do it.
But I think you're starting to find that some of these cards they're being forced to drop some of these fees.
Yeah and the good -- says.
If you wanna call it good news is I guess is -- more subtle lighting and it is good news is that there are these things are coming out of the -- it seems like every month.
Some new card is being created in some celebrities selling assault on the down one had his name associated with it.
And and and what that does Jerry is that you know it creates this competition and that some of these new work hard smaller still not good products.
The pricing is definitely more competitive -- having this conversation a year ago -- would have been extremely overpriced.
Well we've got -- a liquid right that and that thing -- they must have a promotional budget for this thing that would you know.
Find a war in Afghanistan for the next twenty years there's -- -- with no recurring fees -- -- Is -- -- you say it -- the dollar 95 monthly -- the chase card has a four -- five monthly fee.
He don't you think think people were affluent are Smart enough to see through some of the stuff.
Yeah I did I think you make it very good point not only about the marketing budget what is that smell like that's not like it's huge margin right.
But -- -- I I'm not sure -- Clever this one has to spend a whole lot of you know going after the more -- -- and therefore the savvy error.
-- and personal finance -- that -- issue with these cards.
Is that they're not as good of an alternative adds even just a simple gift card you don't watch a more per dollar in -- and hats and has no re occurring feast.
Certainly credit cards in the way better because it's not -- money someone else's money or prepaid debit -- to your money and I heard what I think it's probably the most disingenuous.
Comment about why these cards are getting.
More popular by the American Bankers Association they said on -- quite exactly right this is going to be pretty close.
That the momentum in the driving force behind these products is that they -- exciting.
I -- guarantees -- One consumer.
There's not one consumer in this country that thinks that prepaid debit cards are exciting that is a joke.
I really what I have infinitely more respect for these -- that they come flat out and say.
The reason for pushing the heck out of me saying this -- or an enormously profitable loaded with fees we deceptively market -- and -- noticed cap on interchange.
-- -- where they're dealing with outright -- isn't.
Also the fact that they'd rather have fewer bank accounts I mean let's face it it's really expensive for them to run all those checking accounts.
Yeah I and that's a very good point it it is an alternative.
Revenue source to -- traditional relationship that we had with banks.
-- all these new all the new rules on all the new legislation if you love it or hate it doesn't matter what but the fact is -- -- -- -- it makes it more expensive to -- -- bank.
So what that means is -- got to figure out other ways to monetize but to monetize the consumer this is -- except I'm really scared what we're gonna see in twelve months wow wow.
That means we have to have you back John thanks for looked in the curtain was in -- always showing us what's going on the background with banks we really appreciate it thank you.
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