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Late last year, American Express launched Bluebird, a new checking/debit card product marketed via Wal-Mart stores nationwide. The card has garnered quite a lot of positive attention in the months since then for its convenience, flexibility, low cost and generous point-earning potential per-dollar-spent.
Having Bluebird in your wallet does not affect your credit. The card is for anyone seeking to minimize account-related expenses with, and membership in, a regular bank. Bluebird’s main demographic is the “underbanked.” That is, clients who do not have standard access to mainstream financial institutions, and who must rely instead on check-cashing facilities and non-traditional providers. The Federal Deposit Insurance Corporation (FDIC) estimates the underbanked at 20.1% of the population, or about 24 million adults. This is a huge, largely untapped client source that American Express and Wal-Mart are now reaching out to.
Regulatory agencies have long urged traditional banks to welcome this market, but with mixed success. The FDIC recently found significant problems still exist. Only 37% of banks across the country actively market the unbanked. A long list of prepaid debit cards – often heavy on fees and short on perks – have emerged to fill the gap. Bluebird could be an exception.
Wal-Mart says the card was developed for millions of customers who are looking for advanced capabilities such as deposits by smartphone, mobile bill pay, no minimum balance, or any account maintenance fees whatsoever. Bluebird growing pains mostly center on complaints about slow service center response, and inadequately trained service staff who have difficulty answering questions. Hiccups that are likely to go away as Bluebird gains acceptance.
Administered by American Express, Wal-Mart sells the cards and offers customers thousands of locations to make deposits and withdrawals. Bluebird holders who open a direct deposit account do not pay fees at MoneyPass ATMs, including Money Center Express machines at Walmart. Thousands of locations can be quickly found on the web. A $2 network fee applies to card holders who do not a have Direct Deposit account.
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Public reception has been upbeat. Many points-earning cards do not allow mortgage, car or utilities payments, unless a user fee is tacked on. Bluebird has a bill paying option, either through a pre-established list of payees, or by check from your account to any payee you want. And the process is do-able from a mobile app.
Central to Bluebird’s usefulness is the prepaid money-infusion method, Vanilla Reloads. Prepaid reload cards are purchased in varying values for $3.95, plus their face value. You can buy these reloads at CVS and other convenience stores in $500 increments.