These individuals are waiting on line at check-cashing (establishments) with no way to pay bills or reserve hotel rooms. "They bounced too many checks, overdrew accounts or defaulted on credit cards and so are completely cut out of the financial system. "We have a number of customers (who can't) walk into a bank and get an account," said Craig Marshall, president of UniRush. The card's backers say they provide a valuable service for people who are excluded from the banking and credit-card systems. Add them up to see what is the best benefit for you." "The key is, if you're going to use one of these cards, go online or make some phone calls and ask about all the different fees. The fees appear to be higher than they need to be. "But generally, they cost more than a bank account. "These cards can be a convenient transition between the cash economy and the banking system," said Gail Hillebrand, senior attorney with Consumers Union in San Francisco. UniRush said it hopes to sign up loading facilities that will charge $3 or $4 to put money in RushCard accounts. While direct deposit is free, customers who don't have steady paychecks can pay MoneyGram $6 or $7 to add funds to their account. Monthly fees to UniRush are capped at $10, but ATM surcharges to banks can add several dollars to that. There's a $1 fee every time the customer makes a purchase or writes a check each ATM withdrawal costs $1.50 plus the fee - usually $1 to $2 - charged by the bank that owns the ATM. In response, card advocates say that they're cheaper than check-cashing places or than paying the stiff fees for bounced checks, and that many of the prepaid card customers don't have alternatives because their financial history is littered with unpaid bills and bounced checks. Of the 15 prepaid cards in the report, the RushCard was one of the least expensive, as it does not charge a monthly participation fee. "The outrageous fees associated with this financial product make it a poor choice for struggling low-income New Yorkers," the report said. They often cost more than regular checking accounts, PIRG found. An April report by New York's Public Interest Research Group called prepaid cards the priciest plastic of all. Tom Miezejeski, vice president of research at Pelorus, goes so far as to call stored-value cards the fifth major revolution in currency (the earlier ones being the introduction of coins 4,000 years ago, the development of checks 400 years ago, the growing popularity of paper currency 200 years ago and the development of the credit card 50 years ago).īut consumer advocates say the cards charge excessive fees. They're also being adopted by employers and government agencies as a convenient, paperless way to issue paychecks and assistance payments. The number of prepaid cards, which carry no risk for the issuer because they can't be overdrawn, will hit 22.5 million this year, according to the Pelorus Group, a New Jersey market researcher. In fact, major financial players like Visa, MasterCard and Citibank view the unbanked as a lucrative, untapped market. ![]() The banks looked at the people in the face and did not see enough money in their eyes to pay attention to them." "I'm doing something the banks should have done. "Everything that we do comes from hip-hop culture, which is the expression of people who are struggling," he said in an interview, speaking with the distinctive cadence of a man who sees poetry woven into daily life. Simmons, whose company has signed up about 300,000 RushCard customers in 18 months, sees the card as consistent with his message of access, inclusion and empowerment. ![]() There's no danger of bouncing checks or running up big credit-card bills because she can only spend as much as she has deposited. Oliver can withdraw cash at any ATM and can call customer service to have checks written for her rent or other expenses. The card works and looks just like a bank debit card, and can be used to make purchases anywhere that accepts Visa. Her paycheck from her customer-service job at a Brisbane medical-supplies company is directly deposited to her RushCard account. "This card allows me to make hotel arrangements, order stuff from EBay or, rent a car, things I wouldn't be able to do otherwise," Oliver said.
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