Beating Broke

Personal Finance from the Broke Perspective

Suze Orman Releases Prepaid Card. Wait, What?

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Suze Orman, one of the most well known personal finance gurus in the media, announced a few days ago that she had created, and was releasing, a new prepaid debit card.  Prepaid debit cards, if you’re not familiar with them, are cards, like credit cards, where you prepay and then can only use the card for amounts up to what you’ve prepaid.  In most cases, they are marketed towards people who are unable to get credit cards because of bad credit.

Phil, from PT Money, blasted Suze for the card, on his site and on twitter.  I can’t say that I entirely disagree with him.  His problem with the card, and mine, is that prepaid cards should be a last resort for people who are unable to get a bank or Credit Union account that has a debit card attached to it.  What Suze is doing with this card, however, is pushing it to the general public who really have no use for it, and, by using it instead of a debit card from their bank or CU, are going to be lining the pockets of Bancorp (the bank behind the card) and Suze.  That’s shady, when you are claiming to be “America’s Most Trusted Personal Finance Expert”.  If she is an expert, she should know better. And, I think she does.  Which is why, instead of responding to PT (and others) on Twitter with a factual defense of the card, she had this to say:

Suze Orman Calls PT Money an Idiot
Suze Orman Calls PT Money an Idiot

Terrible way to take criticism, Suze.  To some degree, I discount her response because of the “sassy” way that she responds to questions and such on her shows, but I think she crossed the line here.  It’s one thing to tell the guy who calls in and asks if he should buy a new car when he’s 500k in debt an idiot, but another thing altogether when you’re calling a guy an idiot simply because he thinks your new prepaid card is a bad product.

Is the card a bad product? To Suze’s credit, unlike some prepaid cards that have had celebrity endorsers, this one has plenty of good things going for it.  It includes a credit watch program, and a free credit report with credit score.  It’s got a program to allow you to put money into a separate account for an emergency fund, free bill pay, and the ability to transfer money from one cardholder to another.

But, my Credit Union has all those things.  A $3/month fee on the card isn’t the worst of the cards, but it’s still a fee.  $36 a year to have access to your own money via a debit card?  Come on.  Again, my Credit Union does that, and they do it for free.  Yes, there are some who are unable to get a bank account.  And for those people, if you absolutely need to have access to a Visa/Mastercard card, then go for it.  But, despite what Suze is claiming, don’t expect it to improve your credit score.

There is no way that any of the credit agencies are going to take your activity on a prepaid card into account.  They’ve never taken your cash spending habits into account, and a prepaid card is no different than spending cash.  Would it be nice?  Absolutely.  Many of us who make most of our transactions on debit cards or with cash would agree.  But, it isn’t going to happen.  Your cash spending has nothing to do with your credit, so why would a credit score take that into account?

I just don’t see enough difference between this, and other similar cards to say that Suze went out on a limb here and created a product that is going to change the industry.  As a prepaid card, it’s decent.  There are better.  In the end, it’s still just a prepaid card that should be used as a last option when you can’t/won’t get a bank or credit union account with a debit card.

Read what some other Personal Finance Bloggers are saying:

Suze Orman’s “Approved Card” gets Denied; Thinks PF Bloggers are Idiots

Suze Orman’s new prepaid debit card: The Approved Card

My two cents on Suze Orman and her prepaid card

Young, Gullible, and Broke: Suze Orman’s debit card FAIL

Suze Orman’s prepaid debit card scam

Suze Orman’s Card is Not Approved by Me

Suze Orman’s Approved Prepaid Debit card is Bad for Consumers

Suze Orman Shows True Colors with Her Approved Prepaid Debit Card

And that’s just a smattering of the posts on the subject.  I have yet to come across one that is entirely positive about the card. What do you think? Do you think that Suze did a good thing here, or is it just another way to milk some money out of her followers?

Save Money by Turning Off Appliances

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Saving money isn’t the only thing out there if you want to become wealthy.  All it does is reduce the amount of money you spend.  You’ve still go to find ways to make more money through a better paying job, passive income, or a second job.  But, it’s still an important part of a well-rounded wealth plan.  One of the more popular, green, methods of saving a few dollars is to turn off your appliances.  Turning them off isn’t the end of it though.  Many of them still pull a small amount of energy from the electrical system even when they are, technically, off.  While it isn’t a whole bunch, it still can amount to enough to keep you from realizing your full savings.  In the UK, they have electrical sockets that have switches built into them that turns the socket completely off, and cuts it’s supply of electricity.  Unfortunately, here in the US, we don’t have such a thing.  But, we can buy power strips and adapters that have timers and switches to cut the supply to the sockets.

Power Strips

Power strips come in many different shapes and sizes, and almost all of them have a switch of some sort on them to cut the power.  Buying one isn’t a huge problem.  Your local Walmart likely has several to choose from.  Consider the things you’ll be plugging into the strip, however, when shopping for one.  If you’ll be plugging in sensitive electrical equipment, like computers, DVD players, laptops, and printers, you’ll want to have one with a surge suppressor, at the least.  You might even consider getting one with a battery backup system so that the equipment stays on when there’s a power outage.  If you want to get really fancy, take a look at this strip from Belkin.  It’s the Conserve Smart power strip.  It’s got a socket that can detect when the item plugged into it is turned on or not and shut off several of it’s other sockets based on that info.

Power Adapters

Adapters also come in several shapes and sizes.  If you want to get a close look at what you are using in electricity, you can use an adapter that will monitor usage and has a readout of the total usage. Something like this Kill-A-Watt energy usage monitor would do the trick.  A more simple, and elegant, solution is the Belkin Conserve Energy Switch.  It’s a simple adapter that goes between the socket in the wall and the device you’re plugging in.  It’s got a toggle switch built right in allowing you to simply flip the switch and cut the power to the device.  It should work great for devices like coffee makers, shredders, and anything else that doesn’t require multiple sockets or anything fancy.

Pull the Plug

Yes, there is an even simpler solution.  Simply pull the plug from the outlet.  No fancy adapters or power strips needed.

With any of these solutions, there’s a small amount of learning curve in play.  You’ve got to learn to remember to flip the switch or unplug the stuff when you’re not using it.  You’ve also got to learn to remember to flip the switch back on or plug the stuff back in when you do want to use it.  Not the biggest thing, and as you do it more and more, you’ll get used to it.  One small note, that I don’t think I really need to say, but I will anyways, is that this isn’t meant to be the be-all, end-all of conserving energy methods.  Making sure you’re using the most energy efficient appliances in the first place, for instance, is likely to save you a lot more on your energy costs than unplugging appliances.  Switching out your incandescent light bulbs for more energy efficient alternatives is also more likely to save you more money.  But, if you’re looking to squeeze a few more cents from your watts (terrible electricity pun, I know.), you’ll do everything you can to save some money, including unplugging or cutting the power to your appliances with a switch like those mentioned above.

Share with everyone!  What are your energy conservation tricks?  Do you turn the heat off all winter and wrap yourselves in wool blankets?  Do you turn off the fridge in the winter and simply store your goods outdoors in the snow?  Tell us!

Reasons why homes owners should consider “going green”

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Everybody knows it’s great to go green, but have you ever considered why? Here’s some advice for homeowners on how greening their homes can lead to a higher quality of life.

1. Homeowners with greener homes pay less for water and electricity each month. If you’re one of the green-savvy homeowners who have installed solar panels or a solar water heater, you are at a great advantage. Although these systems are usually used to complement traditional means of providing electricity and heating water, some lucky homeowners have discovered that they can produce enough green energy to go entirely off the grid. Not to mention that maximizing natural light can lead to lower consumption of electricity, as well.

2. Green homes last longer and sell higher. For those homeowners who are fortunate enough to be able to build their dream green home or participate in the construction of a home already in progress, green additions can be well worth the investment. Not only do these homes produce less waste during the construction process, but their green features — such as reclaimed bamboo floors and solar panels — last longer, giving them a higher resale price if you ever decide you want to move. And who knows how much more in-demand green homes will become as fuel prices continue to rise?

3. Green homes are healthier for you. When going green, it is important to think of the little things, as well. Using non-vinyl window blinds can help reduce the amount of lead particles in the air around your home, as well as using chemical-free paints. These chemicals, when ingested over a long period of time, can lead to health complications that you may not even be aware of. So greening your home is also a way to live a longer, healthier life.

Don't forget to recycle!4. Green homes require less maintenance. Whilst you’re spending time around the house this year treating your deck and polishing your floors, consider this: design materials made from recycled product often require little to no effort to maintain and last longer. This means that you can actually save both time and money by incorporating things like environmentally friendly flooring in your home’s decor.

5. They help maintain a mutually beneficial relationship with the environment. This may seem like a no-brainer, but green homes do a lot more for the environment than just reduce waste. Home builders who know how to work with the environment in the process of designing their homes can actually use things like the angle of the sunlight to eliminate the need for artificial lighting. They can also take advantage of wooded areas on the land for climate control inside the home instead of destroying the trees.

photo credit: Pylon757