American Express has announced a program for prepaid debit card users that will help them build credit. Using the card won't improve a credit score, but can qualify customers for an Amex credit card.
A chief criticism, according to Time magazine, of prepaid debit cards is that they do not help people build a credit score like credit cards do, which doesn't help the unbanked build credit history. Granted, that's sort of like saying that a Kia is not the very best car to drive because it isn't an airplane. The same also holds true for regular debit cards; the card is tied to a checking account instead of a line of credit.
Suze Orman, super star personal finance expert has introduced her own prepaid debit card. When she announced the card, which is called The Approved MasterCard, she also said that she was working on a program through credit reporting agency TransUnion to allow card consumers to build credit using it. The card does, according to MSNBC, have the advantage of credit monitoring services through TransUnion, but no impact on the user's credit report.
The brand new program, according to the BusinessInsider, is called Make Your Move and doesn't bolster a user's credit rating, per se, but rather functions as a trial period of sorts. If customers meet certain criteria, they might be selected by American Express after a six-month period to be eligible to sign up for an American Express card.
With the brand new card, you can load up to $5,000 a month on the card and withdraw as much as $400 a day at an ATM. It used to be that you could withdraw up to $200 a week. The program is better for customers that want to be using it frequently like a normal debit card.
In 2009, the prepaid debit card industry made $48 billion. That number increased to $65 billion in 2010. It was not until 2011 when American Express finally introduced its first debit card. Discover, Visa and MasterCard all launched programs earlier.
American Express is also introducing a prepaid card at participating Walmart stores, according to the Wall Street Journal, under the brand name "Bluebird." It isn't known if those cards will be qualified for the "Make Your Move" program.
A chief criticism, according to Time magazine, of prepaid debit cards is that they do not help people build a credit score like credit cards do, which doesn't help the unbanked build credit history. Granted, that's sort of like saying that a Kia is not the very best car to drive because it isn't an airplane. The same also holds true for regular debit cards; the card is tied to a checking account instead of a line of credit.
Suze Orman, super star personal finance expert has introduced her own prepaid debit card. When she announced the card, which is called The Approved MasterCard, she also said that she was working on a program through credit reporting agency TransUnion to allow card consumers to build credit using it. The card does, according to MSNBC, have the advantage of credit monitoring services through TransUnion, but no impact on the user's credit report.
The brand new program, according to the BusinessInsider, is called Make Your Move and doesn't bolster a user's credit rating, per se, but rather functions as a trial period of sorts. If customers meet certain criteria, they might be selected by American Express after a six-month period to be eligible to sign up for an American Express card.
With the brand new card, you can load up to $5,000 a month on the card and withdraw as much as $400 a day at an ATM. It used to be that you could withdraw up to $200 a week. The program is better for customers that want to be using it frequently like a normal debit card.
In 2009, the prepaid debit card industry made $48 billion. That number increased to $65 billion in 2010. It was not until 2011 when American Express finally introduced its first debit card. Discover, Visa and MasterCard all launched programs earlier.
American Express is also introducing a prepaid card at participating Walmart stores, according to the Wall Street Journal, under the brand name "Bluebird." It isn't known if those cards will be qualified for the "Make Your Move" program.
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