by Uju Okasi
Black households compose 21% of the 10 million Americans that are considered “unbanked”– unable or unwilling to open checking, savings or credit card accounts. While some find themselves on a Chex Systems database used to deny services to individuals with previous account delinquencies, others, wary of the complex fee matrix imposed by many financial institutions, choose to opt out of banking on their own.
Hip-hop mogul Russell Simmons reaches out to this population with the Rush Card, a debit card intended to provide African-Americans with a means of financial control and convenience. But the Rush Card has come under fire as critics question the card’s value to the black community. For example, professor of finance at Syracuse University, Dr. Boyce Watkins, is unimpressed with the purported mission. During an interview with radio program, “The Takeaway”, he stated, “It’s a very interesting sort of idea here. [Simmons is] saying ‘I’m giving everyone access to the American Dream,’ but I never really knew the American Dream consisted of having a piece of plastic that puts people further and further in debt.”
It’s worth clarifying a few things about the service. Many assume that the Rush Card is a credit card, but it is in fact a pre-paid debit account. Due to whatever restrictions or mistrust bar working class African-Americans from traditional banking, their options for financial transactions lie in check cashing, in-person payment, and manual cash management. Not only does this slow people down, but, as Simmons’ points out, this may even cost consumers time off work as they attempt to deliver bill payments in person.
The Rush Card extends the conveniences of direct deposit, expense tracking and online payments to individuals in desperate need of alternatives. Since the card is prepaid, it is impossible for the holder to overdraw their account and incur fees. The account also offers an optional feature, RushPath to Credit, which reports successful cable, utility, telephone and other bill payments to credit reporting agencies.
Such reports help to build the cardholder’s credit. Parents also find another benefit in the card as they teach their teenagers financial responsibility. Able to load weekly allowances onto the card, parents allow their children to practice financial management at an early age.
Despite the apparent benefits, some of the harshest criticism comes directly from Rush Card customers. While it saves cardholders from overdraft and other bank fees, it maintains a fee structure of its own. Monthly plans begin with a $19.95 activation fee (waived for those enrolled in direct deposit) and charges $9.95 per month plus $1.00-2.50 for PIN and ATM transactions. The Pay-As-You-Go alternative charges the activation fee and plus $1.00-1.95 for PIN and ATM transactions.
Some customers wonder why they should deal with the relatively confusing fee matrix when Walmart and Greendot have similar products, the Moneycard and the MoneyPak respectively, with overall fees as low as $4.95.
In addition to the issue of cost, many customers complain about Rush Card’s customer service.
In instances of identity theft and missing or undelivered cards, many have found that their reports have gone un-investigated and unresolved. Finally, heavily marketed to low-income African-Americans, many are critical of the stigma the card carries.
Nothing’s free and the stigma may always be there — but if Simmons aims to cement Rush Card’s place in the black community as a reliable financial service, attentive care towards customers’ needs will have to become a priority. If not, he’ll see his customers rush right into the hands of companies with a better grip on service.
monthly Rush Card plan charges no monthly fee but $2.00 for ATM withdrawals and the convenience fee. Some customers wonder why they should deal with the relatively confusing fee matrix when Walmart and Greendot have put out similar products to the Rush Card (the Moneycard and the MoneyPak respectively), with a $3.00 flat monthly maintenance fee and no convenience fee at all. In addition to the problem of fees, many customers complain about the ineffective and unresponsive customer service that supports the Rush Card. In instances of identity theft and missing or undelivered cards, many have found that their reports have gone largely uninvestigated and unresolved. Finally, as yet another criticism, many wonder about the stigma the Rush Card might cast on its users. Because it is a card marketed towards underprivileged African-Americans, some worry that using it might outwardly mark them as poor or disadvantaged because of their race.
Overall, however, the majority of users sing its praises. They enjoy the conveniences it affords them and the control they’re newly able to exercise over their finances. Most argue that the card does not stigmatize them any more than the Greendot MoneyPak, and they are glad to be supporting a black owned business through their consumption. As for the convenience fee, they find it manageable and point out that fees over $10.00 incurred in a month are returned to the balance of card at the end of that month. The majority of customers, however, still decry the poor customer service. As such, if the Rush Card intends to grow to become a powerful tool in the African American community, attentive care towards customers’ needs will have to become a priority for Russell Simmons’ financial company.
