Image, it turns out, really isn’t everything.
Exhibit “A” is the recently canceled Kardashian Kard – a prepaid debit card geared to the People magazine market that loves “Keeping Up With the Kardashians.”
The marketing concept was obvious. Target a young audience – the ideal market for a prepaid card. Plug in a hip, Hollywood reality television family, and you have the makings of a profitable business model.
However, after Connecticut Attorney General Richard Blumenthal publicly criticized the card’s outrageous and predatory fees, the Kardashian sisters announced their decision to pull out of the deal.
Wait a minute – weren’t these predatory fees banned by the new consumer protection laws under the CARD Act? While the Credit Card Accountability Responsibility and Disclosure Act of 2009 did help to curb excessive fees charged by credit card issuers (see the new law’s fee restrictions on Credit.com), these fee protections don’t apply to prepaid debit cards.
We talked to chairman and co-founder of Credit.com, Adam Levin, to get the scoop on the Kardashian Card’s “outrageous” fees, and on prepaid cards in general – the good and the bad.
“It’s true, the fees on this card were high, but then high fees are synonymous with most prepaid card offers,” says Adam.
This is why it’s important for consumers read the terms and understand the ramifications of these fees on any card offer – whether it’s a prepaid card, a debit card or a traditional credit card.
“It doesn’t matter how big, bold, bright, better positioned or easily understandable the print is – if you don’t read it.”