Personal finance
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Russell Simmons’ RushCard Lowers Fees, Is Still Bad
If anyone still uses Russell Simmons’ Rush Card, they’re in for sort of good news: Simmons will be lowering the exorbitant fees that make the card not worth having in the first place. But not by that much.

The RushCard was pilloried when it was first released for boasting some of the steepest fees of any prepaid debit card, ever. It offered two pricing plans, both of which were ludicrous. In one, users paid $9.95 a month for the card and an additional $1 every time they typed in their PIN on a transaction. The other plan, ‘Pay As You Go’, had no monthly fee, but it cost $1 every time customers swiped their card and $1.95 every time they used an ATM. The swipe fees were capped at $10 per month, but users were reimbursed for overages the following month.

The card had such a bad reputations that Simmons was heckled by Occupy Wall Street protesters about the card when he visited Zuccotti Park last fall.

Now, RushCard has announced that they will be streamlining fees, and lowering them. The fee to enroll in bill payment ($2), the fee for paying bills ($1), the plan change fee ($1.99, for switching between ‘pay as you go’ and the monthly fee plan), and replacement card fee ($3.95) will all be eliminated. This is a nice gesture, considering one of the reasons prepaid cards exist is to provide the unbanked a convenient way to pay bills — now they won’t be gouged for that.

The RushCard will also be lowing the RushCard-to-RushCard fund transfer fee from $2.95 to $0.99.

For customers who use direct deposit to put funds on their RushCard, their monthly fee will be lowered to $5.95; for those who do not, their fee will be $7.95. Additionally, customers who keep an average daily balance of $500 and above will get $2 in fee rebates a month. So should you meet this requirement, and use direct deposit, you will still pay $3.95 a month to use your RushCard, in addition to any other fees you might encounter — you only get two free ATM withdrawals each month, for example, after which point they cost $2.50.

The RushCard is still quite expensive. And again, we must point out — as we did with Suze Orman’s card — that if you’re getting a fee break on your prepaid card by using direct deposit, don’t you have a regular and substantial enough income to warrant getting a checking account? A checking account that would likely not be stacked with hidden fees?

Prepaid cards, by trying to mainstream themselves and offering discounts to those who use direct deposit, are undermining the most compelling argument for why they should exist — that they provide a necessary service to those without access to traditional banking services. But those with biweekly paychecks can easily find a checking account to meet their needs.

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