by R. Asmerom
The Kardashians probably already knew that endorsing a prepaid card was not the way to go in the first place but they certainly didn’t expect the backlash they received from the press and personal finance experts after the “Kard” was unveiled. When celebrities like the Kardashians and Russell Simmons decide to put their name on a prepaid card, they tout the benefits of teaching non-bank holders and credit card holders about personal financial responsibility. What they often leave out is that these cards come with fees. “The Kardashian Kard is not the way to help out their fan base,” said Ornella Grosz, author of Moneylicious: A Financial Clue for Generation Y. “The fees were exorbitant and the Kardashians don’t represent financial savvy. They can afford to spend $20,000 on a shopping spree while their fan base are in no position to.”
The Kardashian Kard was pulled after Connecticut Attorney General Richard Blumenthal wrote a letter Friday to the card’s issuer, University National Bank, asking about the legality of the card’s “pernicious and predatory fees.”
The Kardashian Kard was far more expensive to maintain than a regular debit card. According to CNNMoney, a 12-month Kardashian Kard cost $99.95 just to own, including a card purchase fee of $9.95 and 12 monthly fees of $7.95. After the first year, consumers would have to continue to pay the $7.95 monthly fee. On top of these initial fees, it cost Kardashian Kard users $1 every time they added money to their card, and it cost $1.50 to speak with a live operator. If they wanted to pay their bills automatically using the card, they were charged $2 per transaction.
Mitch Goldstone, an ecommerce business owner and a lead plaintiff in a lawsuit against MasterCard, Visa and major banks over anticompetitive antitrust issues regarding credit and debit card fees, believes that although the Kard was a bad move on the Kardashian’s part, it served consumers well in a sense. “The Kardasian Kard event was epic, it helped draw international attention to unfair credit card [prepaid] fees,” he said. “I have been using social media tools to urge MasterCard to pull the prepaid “Kard,” my campaign seemed to work, but the plug was pulled by the Kardasian’s instead. My concern is the card was like a drug dealer, getting people hooked and then faced with debt.”
