The Nitty Gritty on the Rush Card
In a recent Generation Debt article, Anya Kamentz discusses Russell Simmons expansion to the financial services industry through the Rush Card, the Visa-logo prepaid debit card. As you may know, Russell Simmons is a cofounder of Def Jam Records. Simmons definetly knows a thing or two about money, he sold Def Jam in 1999 for a whopping $100 million bucks, and built Phat Farm an urban-focused clothing company. Most recently, he began marketing the card as a solution to people who don't have a credit card. He rightfully notes that renting a car, booking a hotel or buying a plane ticket can be greatly inconvenienced by not having a credit card. So, viola the Rush Card appears to fill the gap. At face value, a prepaid debit card seems to be a pretty good to low-income Joes, many of whom are people of color. For no credit check, no security deposit, you can get a Visa card that you can fund with direct deposit, bank transfers, money grams, even a tax refund--but anyone who uses it gets a raw deal.
First, there are activation fees of up to $19.95, per transaction fees of up to $10 per month, telephone balance inquiry fees, overdraft fees, ATM withdrawal fees, and worst of all, inactivity fees. (To see the entire list click here, then go to "Schedule of Fees".) Whew! Second, by funding the card before you need it, cardholders don't earn any interest--to the contrary you get charged for not using the card, further chipping away at any money you have. Third, debit cards don't appear on your credit report, meaning even if you use them well, you won't get a boost to your credit report. I called the general customer service number last night to confirm. After being on hold for 15 minutes, a customer service rep confirmed that the "card has nothing to do with your credit, since it's prepaid."
As Kamentz notes, the average prepaid Visa card costs about the same as a check cashing place, an annual average of $320 per year; Russell Simmons' card is about $180 per year. She also notes that an even better bet might be one of the many banks offering no minimum checking accounts, as they run an average of $36/year assuming no overdrafts.
All things considered, even though the Rush Card claims to offer "financial power and freedom" in reality, it looks like its low-income customers get the short end of the stick, once again if Russell Simmons really wanted to improve financial power and freedom for low-income people, perhaps he might consider offering a secured credit card, attached to an interest-bearing savings account to actually improve credit scores instead of just lining his own pockets and, in the long run, not doing much for his clientele.
This is also posted at Financial Freedom Trek.
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First of all, I would like to say that in the beginning, in the deffense of Rush Card, that it seemed to be a huge help financially for me, as far as purchases that I made on-line, reservations for hotels, or by bill paying on line. Of course, That was THEN! Now...I have been plagued with problems! First of all, they don't explain to the customers in writing, or thru there customer service reps., that if you try to rent a car, you have to have been with the company for at least six months, and show that you have direct deposit set-up! On one incident (and trust me, there have been several) I had planned a trip for my son and I to Gatlinburg, Tenn. I had everything planned out, from hotel reservations, to reserving a car on-line. The day before the trip, I contacted the car rental place to confirm the exact amount that I was to have on my card (just to make sure it was not going to disrupt the other funds that I had put on the card as well) in order to reserve the vehicle; that part went fine. I called Rush Card, to make sure that everything was going to run smoothly on there end, when I arrived to pick up the car; and of course it turned out to be "HOUSTON, WE HAVE A PROBLEM"! They stated that I did not qualify to rent a car, due to the fact that I was not a member long enough, and I did not have direct deposit (that is another story, which lead down the path of hell for me), and I did not have over $500.00 loaded to my card at once. I stated to them, that if you look at the time frame that I had the card in my possession, you can see OVER $2000.00, worth of money that was loaded to my card! I did not set-up direct deposit, because of the fact that I sent the form for direct deposit to Rush card, and even specified to them the time and date, and they stated they never received the form. Anyway, back to my first nightmare, when I spoke to the gentlemen at the company, he stated that the policy is, you have to be with the company for at least six months, and at that time I was with them for 4 months, and you have to have the direct deposit set-up in order to rent a car! I asked him, if that was the case, WHY WAS IT NOT STATED IN THE CONTRACT THAT I READ THOROUGHLY, THAT INFORMATION!!!??? WHY WAS I NEVER TOLD THAT IN JANUARY WHEN I CALLED TO ASK SPECIFICALLY ABOUT THIS???!!!! He said he did not know, but that is there policy. When I asked to speak to upper management, he put me on hold for exactly 25 min. never checking on me the entire time I was holding; later, he came back to the phone, and said, ma'am, I am trying to get management for you, please hold. All in all, I never spoke to a manager, because there "was not a manager around"! After I demanded to speak to someone, he puts me on hold again, but this time I was greeted with the dial tone! You can imagine my fury after taking time out of my busy schedule at work to call, and get mistreated so badly! After a few choice of words to the next guy I called and spoke to, He assisted me with NO PROBLEMS!! He apologized numerous times, and said that the other rep I spoke to, could have given me the approval to use the card, without any hassle, but instead he chose to act like the a@@ he was! I finally received justice, and everything went smoothly at the rental car agency. But for future reference, I will go straight to the car rental place, and avoid the middle man. In conclusion, I want to state, during the time I have had this card, with all the CRAZY fees, and bank charges, and GOD AWFUL CUSTOMER SERVICE, I asked myself, why do I still continue to have this card in my possession, if I could not direct deposit my refund check to my card; I had someone else's charges put on my card DUE to the DEBIT CARD MACHINE at the register, keeping my number in the system, even after I walked away from the machine and the guy behind me USED MY NUMBER FOR HIS PURCHASE; I could not set-up a direct deposit thru my employer because Rush stated (even though I had the transaction sheets) they never received my paperwork, so I was without a payroll check for a week because of them; and lack of information that they DO not supply to the consumer in the contract, nor by phone ("don't ask, don't tell rule"), to answer my question as to why I still continue to carry around this problem after dealing with "hell's angels"....to simply fill a empty spot in my billfold! If I get a chance to talk to Russell Simmons' about his so-called "easy managing money business", I would tell him first hand, he needs to go back to the drawing board on this idea, and speak to some of the consumers whom he is trying to reach, and ask them how they feel about his new creation; Outside of his box, of course! Thank You
