Kaching!!!Wal-Mart Debit Card

[mickeyd]

MySA.com

Quote:

"It generally strikes me as positive. In today's society that is more and more cashless, somebody who doesn't have access to cashless transaction vehicles is at a disadvantage," said Ciccotello, who is director of the personal financial planning program at Georgia State's business college. The Wal-Mart MoneyCard costs $8.95 to buy and $4.95 for monthly maintenance. Cash can be loaded on the card for free by cashing a payroll or government check at Wal-Mart or direct depositing. Otherwise it costs $4.64 to reload the card.

Talk about a cash cow $8.95+$4.95/month+$4.64+$4.64+....

Not sure how Mr Ciccotello thinks that this is good for folks. This is a card for those who can not qualify for a card. So they stick it to them over and over and over....and the poor folks probably will think that they really have a good deal with their new "card."

[terminator]

These people do not have checking accounts. (And if many of them did it would be a disaster.) There are huge segments of the population that need bank services and have no access to them at any reasonable price. Right now they take their checks to the corner gas station and pay $5 to have them cashed. This would enable them to do it for $5 per month. Throw in the money they save by being able to pay their utility bill over the phone or online instead of driving downtown and having to take time off work once per month to keep the lights on. (Try to picture the hassle of having to take a two hour round trip bus ride just to pay your utility bill. It happens all of the time.) Throw in the money they will save by not losing their cash or having cash sitting around in the sock drawer when the neighbor breaks in after they leave for work. (Here I'm assuming it has the same loss protection as a standard credit card.)

This card would be a horrible deal for the rest of us, but you have to consider how the working poor live. I thought they already sold pre-paid debit cards for face value, but if not, this seems like a reasonably good deal. Anyway, poor people are poor, not idiots, so if they pay for this it probably means it has value to them. If not, there won't be a market for it. WalMart is also not stupid -- they aren't in the habit of offering things that people don't want.

They charge for the bus too, but it seems like a pretty good deal when you don't have a car.

[free4now]

Well said terminator. We who have good credit and access to banking forget that our no-fee accounts are essentially subsidized by those who are not so fortunate and who pay very high fees for many transactions.

[mickeyd]

Quote:

Anyway, poor people are poor, not idiots, so if they pay for this it probably means it has value to them.

I'm not too sure about that. I wish I could find the article to attach but the story goes like this: Texas recently introduced a $50 instant lottery game that was designed to grab the attention of those affluent Texans who wished to play. After a month they analyzed the data and it seems that the 10 zip codes in the state with the lowest income are the biggest buyers of this new game. Affluent zip codes were left in the dust on this one.

[dex]

Look like a good idea for people to build up a good credit rating also.

[HobbyDave]

Quote:

Originally Posted by mickeyd I'm not too sure about that. I wish I could find the article to attach but the story goes like this: Texas recently introduced a $50 instant lottery game that was designed to grab the attention of those affluent Texans who wished to play. After a month they analyzed the data and it seems that the 10 zip codes in the state with the lowest income are the biggest buyers of this new game. Affluent zip codes were left in the dust on this one.

Well, in general (on average / not talking about anyone specifically), people are often poor in the US for a reason. Not just mental capacity, but also the families / communities in which they were raised.

I know many people who were raised in wealthy families and were not given a good enough financial education, but I'm willing to bet that it's better on average than from a poor family.

So I'd say it's extremely likely that poor people are much more likely to be financially ignorant, and not realize that spending $5 per paycheck to get their money deposited is a very bad plan for them.

[SecondCor521]

Quote:

Originally Posted by dex Look like a good idea for people to build up a good credit rating also.

I doubt it would be reported. It looks like the person using it is not being extended credit, since they have to put their money on the card before buying anything (unless I didn't read the article close enough).

2Cor521

[dex]

Quote:

Originally Posted by SecondCor521 I doubt it would be reported. It looks like the person using it is not being extended credit, since they have to put their money on the card before buying anything (unless I didn't read the article close enough). 2Cor521

It is a Visa card so I would guess that Visa would upgrade it to a cc.
I would also think Visa will be sending these people cc applications with the info they get on the amounts deposited on the card.

[Olav23]

Wal-Mart rolling out a different debit card

The new Wal-Mart Money-Card replaces the existing Wal-Mart Prepaid Visa Card but will also be handled through GE Money.

The initial issuance fee is $ 8. 94 and the monthly maintenance fee is $ 4. 94. Adding money to the account costs $ 4. 64, but the fee is waived if the customer is cashing a check at Wal-Mart, a transaction that costs 1 percent of the check’s total. If a user deposits at least $ 1, 000 a month, the monthly fee is waived.

For no additional charge, cardholders can make debit purchases by signature or personal identification number, receive cash back with purchases and check their balance through an automated telephone service.

Extra charges apply for automated teller machine cash withdrawals ($ 1. 95 ), ATM balance inquiries (75 cents ) or paper account statements ($ 2 ).


The Consumer Federation found in a study last year that Wal-Mart’s capped 1 percent check-cashing fee was well below the average of 2. 44 percent to cash government benefit checks. It also found that Wal-Mart’s 50-cent charge for a $ 100 money order was about half the cost of the other outlets surveyed.

Still, the charges can be significant, said Tim Yeager, assistant professor of banking at the University of Arkansas at Fayetteville’s Sam M. Walton College of Business.

An example he calculated: Adding the monthly maintenance fee, the reload fee for amounts less than $ 1, 000, a once-a-week ATM cash withdrawal and an average balance of $ 900 results in a monthly fees of $ 17. 38.

Annualized on the basis of that average balance, that’s 23. 2 percent, he said. “If you’re paying $ 17. 38 a month to handle $ 900, that’s a lot,” he said.

Also from the card faq:

https://www.walmartmoneycard.com/Acc...t/Faqs.aspx#11

Does buying or using this Card build my credit rating?

No. This Card is not a credit card. It is prepaid. Because no credit is granted and no payments are required, this Card does not build credit history.

[joesxm3]

I have a card like this from ePassporte that I use to extract my online poker winnings via the ATM. It cost $33 per year and $2 to take out my $300 per day maximum withdrawal. I can also use it like a VISA card with no fee but no reliably at all merchants.

Prior to the UIGEA law being passed I would just get a check mailed or an ACH teansfer from Neteller. I can also do ACH with ePassporte but it takes 5 days and there is a risk that they will shutdown likw Neteller with money enroute.

It basically sucks, but we poker players are just another exploited minority. I guess it is a cost of doing business.

[nun]

Quote:

Originally Posted by mickeyd MySA.com Talk about a cash cow $8.95+$4.95/month+$4.64+$4.64+.... Not sure how Mr Ciccotello thinks that this is good for folks. This is a card for those who can not qualify for a card. So they stick it to them over and over and over....and the poor folks probably will think that they really have a good deal with their new "card."

I'm with you on this one, its Walmart enabling the spending addiction of those who can least afford it and trying to sell it to us as a service. With the level of debt in this country I'd like to see it become harder to spend money, not easier. It would be interesting to see what it would be like to live without a credit card for a while, a bit inconvenient, but I bet your spending would go down

[W2R]

Quote:

Originally Posted by nun It would be interesting to see what it would be like to live without a credit card for a while, a bit inconvenient, but I bet your spending would go down

I haven't had a credit card for almost ten years after having one for almost a quarter century. Back in the days when I had a CC, I was scared not to have one. There is really nothing to be frightened of. It has not been inconvenient for me at all so far. I use my debit card to buy gas, or in situations where I don't have money with me.

What I have noticed most with no CC is that I pay nothing on fees, interest, or minimum payments. You are also correct in that my spending went down since delayed gratification comes more naturally to me now. That money piles up!!! Eventually I was able to buy my present car, a Camry Solara, in cash. The car payment money that I wasn't paying piled up, in addition to the extra money from not having a CC, and pretty soon I had a down payment on my house. With no other debts, I was able to pay off my mortgage and get a good start on my ER nestegg.

I have absolutely no motivation to apply for a CC now that I have experienced going without. Why would I want to pay fees and interest if I don't have to?

[Cattusbabe]

Same here. My husband and I also do not have credit cards. We can do everything, including renting a car, with the debit cards we have. Just bought a new bedroom set the other day using the debit card. We do not miss them and prefer to pay as we go.

[megacorp-firee]

About 30 years ago, when we got our 1st credit cards, we went on an inadvertent spending spree. You don't realize it, but $20 bucks a few times a day, adds up to $100's (30 years ago!) in no time. Well, long story short, we clip a few cards, kept one set and learned to pay them off when due. I can honestly say, we have NEVER paid any interest on any of our credit cards (now we have 2). We love the idea of letting the banks give us interest free loans.

Discipline is the name of the game.... also an abhorrence to paying interest on these things.

[kendofire]

CC's can be toxic! I'm an example of someone who was addicted to spending what I didn't have. I don't really see this Walmart debit cards a good deal

[megacorp-firee]

hmmm seems to be the corporate equivalent of crack... and Walmart is helping people get hooked. Agreed... not a good idea

[Tadpole]

Quote:

Originally Posted by Olav23 Wal-Mart rolling out a different debit card An example he calculated: Adding the monthly maintenance fee, the reload fee for amounts less than $ 1, 000, a once-a-week ATM cash withdrawal and an average balance of $ 900 results in a monthly fees of $ 17. 38. Annualized on the basis of that average balance, that’s 23. 2 percent, he said. “If you’re paying $ 17. 38 a month to handle $ 900, that’s a lot,” he said. Also from the card faq: https://www.walmartmoneycard.com/Acc...t/Faqs.aspx#11 Does buying or using this Card build my credit rating? No. This Card is not a credit card. It is prepaid. Because no credit is granted and no payments are required, this Card does not build credit history.

So, WalMart is charging people to hold their money. That is called a bank. Even BofA doesn't have the audacity to charge such a bank fee.

Is this WalMart's way of easing it's way into financial services?

[UncleHoney]

Wall Mart isn't the only one picking the pockets of the poor.

Banking on cash: Many in U.S. shun bank accounts, but lose the security - USATODAY.com