The Rush Card and Me

I am a long time Rush Card Customer. Rush Card is, of course, a prepaid debit card that you can purchase and reload as necessary. One day, I noticed that one of the features that compelled me to by the card was not working very well; particularly the implied protection from overdrawing my account. Although I had not been presented the opportunity to spend more money than I had loaded on the card (or even as much), fees associated with this card had caused my account to go into negative territory. 
 I attend school online, and a credit or debit card is necessary for purchasing textbooks from Amazon, or paying my initial application fee. The fact that my Rush Card account seemed to be leaking funds through a virtual hole was unsettling, so I performed a Google search for "Rush Card" without the quotes, because I wanted to review the terms and conditions that I had agreed to. That is when I came across an open letter that Optimum Capitol Management President Ryan Mack had written to Rush Card President and business magnate Russell Simmons in 2010. The letter admonishes Mr. Simmons to stop selling his Rush Card. Mr. Mack makes a very compelling argument, and he accomplishes this with a great deal of tact, respect and sincerity. 
The respect that Ryan Mack shows Russell Simmons is well deserved. Simmons created the Phat Farm clothing line, and co-founded the Def Jam record label. While these are not modest accomplishments, wait until you hear what he does for fun. The man is a vegan, animal rights activist and the recipient of the 2001 PETA Humanitarian Award, and 2011's Person of the Year. I thought that he probably even started the Rush Card with best intentions. This is why another man of renown politely asks Simmons to rethink this particular business venture. Certain, perhaps, that once he sees it from Mack's perspective, he will agree with Mack. Mack says in his letter:

"Making money from ignorance is not the answer...education is the answer and we must provide it. All of our actions must be done for the good of the people and not the good of the pocket. Based on all that you have done for those in our communities, I am certain that you agree."

Several days after I read this letter, I read an article about how Justin Bieber was planning on endorsing his own brand of prepaid debit card. Shortly after that, I was given an assignment in one of my classes that required that I write a story and I wrote mine about prepaid debit cards. The decision was easy for two reason's. The first reason, is that Ryan Mack's open letter is an example of how I want to write as a journalist, or in my everyday life. I want to select my words with a great deal of respect and knowledge for the subject that I am writing about. The second reason, is that I found Mr. Mack's argument against prepaid cards to be a very sound one. More importantly, it served as a miniature wake up call as far as my personal finances are concerned. During the course of researching my story (which you can read here), I was a little bit surprised at what I learned.

 

If you were to sign up for a Rush Card, it will cost you 3.95 for the card alone. This fee would be subtracted from whatever amount that you load initially. The fees that you pay after that point, depend on what plan that you have selected. I cave the "pay as you go" plan. This means that I don't pay a monthly fee (unless I don't use my card for 90 days) but I am charged $1.00 every time I use my card to make a purchase. This is bad as far as these cards go, but not the worst that there has ever been. During my interview with Ryan Mack, he mentioned a few websites, and a few options that, according to him, were better. He mentioned secured cards and online bank accounts. He spoke of how secured cards can help you repair your credit. I was just interested in being spared the fees associated with my Rush Card, so I looked at online checking accounts.
At bankrate.com, I found what appeared to be a good candidate. The bank that caught my interest said that I only needed $1.00 to start a checking account and that they would provide me with a card with the Visa logo; a card with no monthly fees, and free ATM withdraws anywhere, no matter which ATM I use. This sounded like an excellent option, since I pay $2.50 per ATM withdraw with the Rush Card. So I went ahead and gave it a try. 
I was able to easily open a checking account with this bank, online, in about 10 minutes and without the dollar that I was supposed to have. A couple of weeks later, I received my checks and a few days later, I received my ATM card. I have my direct deposit attached to this account, and I am extremely happy. 
When I tell you that this is free checking, I mean that it is entirely free. The only bad thing about online checking accounts, is that there is no way to deposit cash into your account. You have to turn your cash into a money order or cashiers check and mail it in. That's the only way, short of getting real creative. But if you have direct deposit, you do not have worries. Even if you get a paper check from work, there are still no worries; you can use your smart phone or tablet to take a picture of your check and they will deposit it into your account. It seems like a checking account is something small, but it has been a noticeable improvement in my life.
In case you didn't read my story on the Bieber card, Ryan Mack makes the argument that the people who sell these prepaid debit cards are taking advantage of people who don't know any better; people who are not financially literate, and people who do not know how to manage their money because they have never had any. This, in a nutshell, was me. Mr. Mack also advised that I cut my Rush Card up with scissors, and today I am happy to do so. He also suggests that people go into business for themselves. He gave me a couple of suggestions on cheap or free ways to do so. I am currently exploring one of them and will keep you updated.