Very appreciative of Rob Walker’s dissection of The Rush Card for his NYTimes column, Consumed. Ever since I heard about this I thought it was pretty despicable. To want to take advantage of so many people in such an organized fashion, and to be so dishonest about it. Upsets my stomach. I guess there is always the chance they are self-delusional, but that’s no excuse.
There are two versions of the RushCard, one with a sleek black design and the other pink and bearing the logo of Baby Phat, the trendy women’s clothing line. But Palaniappan quickly brushes past the brand appeal of the RushCard: “We’re really focused on helping people,” he emphasizes. “When our customer deals with us, it’s someone who understands their situation.” Not just compared with check-cashing places, he asserts, but compared with traditional banks, which can levy tough overdraft charges on minimal savers who slip up and dip below minimum required balances when filling up the gas tank. And he points to the recently added “RushPath to Credit” feature, which reports debit transactions to a credit-reporting agency, on the theory that this will help the user assemble a positive profile.
Still, the RushCard is an entrepreneurial venture, not a philanthropic one. And one critique of prepaid cards — Wal-Mart offers one, as do others — is that this “empowerment” comes at a price: the RushCard costs $19.95 to obtain, and $1 per transaction to use (that fee is capped at $10 a month). Using one to draw money from an A.T.M. costs $1.95 plus whatever the A.T.M.’s owner tacks on. While direct deposits are free, there are fees to add money in the form of cash (at services like MoneyGram or CheckFreePay) or paper checks. If this sounds like a lot to pay for the privilege of spending your own money, well, that’s a pretty routine scenario for the unbanked. Prepaid cards can work out better than other options, like those high-fee check-cashing stores, though as with any currency instrument, the details depend on the situation — and the behavior — of the consumer.
After all, an actual credit card might represent interest-free loans deployed by a savvy consumer, or it might represent ruinous debt. It seems odd that flashing a piece of plastic that might be the engine of negative net worth could represent social status worth emulating, but surely that’s the case: the currency that the RushCard and its competitors help users manage is, at least in part, the social kind.