When she announced the debut of her new prepaid debit card this week, personal finance guru Suze Orman told MSNBC, “I decided to create The Approved card after I heard from so many people who were being taken advantage of by the tricks and traps of the banking industry. I want to help people who need a low-cost alternative to what’s out there, and who want to manage their money responsibly.”

That’s a pretty admirable goal, but does this Suze Orman-endorsed piece of plastic really live up to those expectations? Does it really do anything more for lousy credit scores than the other “bad-credit” credit cards on the market?

Don’t get your hopes up.

To Orman’s credit, she’s helped millions of Americans take control of their finances. Her books are all bestsellers (we’ve read more than a few of them ourselves), and she hosts her own television show. Even Oprah loves her. It’s safe to say that she’s the most adored figure in finance since Alan Greenspan.

And that’s why the Approved card is such a disappointment. It’s not that it’s a bad card. It’s that it really isn’t all that great either. We’ve come to expect excellence from Orman, but she gave us something average.

Designed to help the 25% of unbanked Americans build a good credit rating, the card only costs $3 to buy. It reports all transactions to credit monitoring company TransUnion, and it allows cardholders to access their scores for free at any time. Since you have to load the card with money yourself, there’s no risk of going into debt. It even comes with the same fraud liability protection guaranteed to standard consumer cards under the CARD Act. All in all, that’s a pretty fair deal – but the perks aren’t much different from the ones offered by other prepaid debit cards.

There are also downsides to the Approved card that Orman’s faithful will have to cope with. The card charges a $3 monthly fee for maintaining an account, plus $2 per paper statement, $2 to call customer service and $2 for an over-the-counter cash withdrawal. While it lets customers use the Allpoint ATMs found in retailers like Target and Costco for free (as long as you have a monthly direct deposit set up), the Approved card also charges a $2 fee in addition to operating costs for any out-of-network ATM transaction. As a result, consumers can expect to pay about $5 every time they use an ATM.

That’s not the worst part about it. The biggest drawback of the Approved card is that using it won’t actually boost your credit rating. Though Orman has boasted that her pet project is the first prepaid debit card to report to TransUnion, those reports don’t appear on your credit score. As SmartCredit president John Ulzheimer explains, the data “is being sent to TransUnion for the purposes of research. If you read further into the website it says plain as day: ‘This data will not appear on your TransUnion credit report at this time.”

So what’s the final analysis? While the Approved card might be a useful tool to help consumers build good financial skills, it isn’t anything special. The perks don’t really outweigh the fees, and the transactions you make have no effect on your credit score. If you really want to rebuild your credit rating, go for a secured credit card instead. The fees suck, but at least you’ll be building a history. That’s our opinion at least.


  1. You do realize that it's not a credit card, right? It’s a prepaid debit card. You refer to it as a credit card in the piece.

  2. The biggest misunderstanding about Suze Orman's prepaid card, unfortunately stoked up by Orman herself, seems to be the notion that the Approved Card, as it is called, can help its users improve their credit scores. So it's time we set the record straight: the Suze Orman's card does not affect your credit score in any way, either positive or negative. Colleen Tunney-Ryan, a spokeswoman for TransUnion, a credit bureau that has partnered with Orman to provide her card's users with access to their credit reports and scores, states it plainly: "It is important to understand that this data will not appear on any TransUnion credit report at this time." I think that should settle it. Learn more here: http://blog.unibulmerchantservices.com/suze-orman….

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