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RushCard Customization Does Not Mean Lower Fees for All

By Ben Jackson
February 11, 2011
in Mercator Insights
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Mobile apps concept in flat design style.

Mobile apps concept in flat design style.

On Jan. 5 UniRush LLC, the programmanager responsible for the prepaid Visa RushCard, announced thatit offers a “pick your card, pick your plan” feature that would letRush Cardholders “choose among four different card designs, amonthly fee plan or charge per transaction plan.”

This was picked up on in the press as UniRush lowering fees in theface of the Kardashian Kard debacle, but a close read of thecompany’s press release shows that while the initial purchase priceof the cards has gone down, the overall cost of using the cardstill depends on cardholder behavior. While the Kardashian Kard mayhave caused legislators and regulators to think about the feesbeing charged for prepaid cards, nonetheless, the changes inRushCard pricing should not be viewed as a sign that the industryis running scared.

From the release:

“Previously, the RushCard and Baby Phat cards had a $19.95purchase fee that was restricted to the pay-as-you-go plan, whichincludes a $1.00 fee for each transaction capped at $10 a month and$1.95 for each ATM withdrawal fee. The recently launched Diamondcards had a $3.00 purchase fee that was restricted to the flatmonthly fee plan, which includes a monthly flat fee of $9.95, freetransactions on signature purchases and two free ATM withdrawalsper month. With the new fee plans, RushCard members can pay cardfees ranging from $3.95 – $14.95 for either the RushCard orBabyPhat cards or the recently designed Diamond card. All otherfees in the pay-as-you-go plan and in the monthly plan remainunchanged and services including calls to customer service arealways free.”

The full text of the pressrelease can be found at: http://www.rushcard.com/rushnews.aspx?newsid=15

Looking at the fee schedule on Rush cards, the topprice a cardholder might pay has dropped by $5.00, but the lowestprice has actually gone up by 95 cents. The cost of using the cardeach month is about $10.00, depending on the number and type oftransactions made.

This is true of all prepaid cards. The cost of using one can varywidely based on the cardholders’ financial needs and the feescharged for services such as ATM withdrawals and bill payments. Asthe industry prepares to reposition itself in the wake of theDurbin amendment (which opens the doors to new markets in itsbusiness) and prepares to defend itself against restrictions onfees, it should take care to note that prepaid cards offer servicesfor fees and that the true cost of any card depends – in large part- on the behavior of the cardholders themselves.

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