“The RushCard is only for those who’ve been rejected by banks.”
The RushCard was created as a vital utility for the 60 million Americans who are
either un-served or underserved by the traditional banking industry. However, rising
bank fees and the rising value of alternative services like the RushCard have recently
made prepaid re-loadable debit cards a smart option for the American middle class
as well. In fact, nearly 30% of RushCard applicants over the past year had a bank
checking account when they applied for the RushCard and that percentage is increasing
over time.
“RushCard members would be better off with a free checking account.”
More than half of the RushCard members can't get conventional bank accounts. Banks
either refuse them any access or drop them because they're too small, perceived
as too risky or both. Few if any banks are interested in earning business from working
people who live paycheck to paycheck because this business is unprofitable for them.
Unlike RushCard, most conventional banks have vast brick and mortar infrastructures
and layers of bureaucracy to allocate to customers; we have a fraction of a bank’s
overhead and use technology and partnerships to keep our costs low.
We strongly believe, based on research, that banks either don’t want customers like
ours, or only want them if they can get fees from them. Even the nation’s leading
bank, JP Morgan Chase, acknowledged this fact in a 57-page report written in September
7, 2010, in which it examined issues including “Fees can make maintaining a bank
account expensive” and “not so free” checking.
The JP Morgan report shows that the cost of using a RushCard is 49.3% less than
the average cost of a “free” checking account from the top 10 banks in the US.
With rapid deployment of technology and a fraction of conventional overhead, RushCard
will remain the low-cost provider of payment services for most working Americans.
“RushCard takes advantage of people who can least afford high prepaid card fees.”
RushCard gives financial management tools and options to its members. In fact, results
from a recent survey continue to show that members are saving by using their RushCard.
Of those surveyed, 75 percent reported they are saving between $300-$900 a year
by using the money management pages in the free online account , where members set
their spending levels in 14 categories—including auto, dining, health and fitness,
and utilities.
Fifty-two percent strongly agree that money management pages at rushcard.com have
helped them save money, up from 41% in 2009. Also, 54% of survey respondents strongly
agree that RushCard’s money management pages have helped them stick to their budget,
up from 44% in 2009. Also, members have told us that our free budgeting tools have
allowed them to avoid costly loans.
RushCard has become the choice of more Americans because consumers are wising up
to a whole array of old and new fees on the so-called “free” checking accounts.
Our members like RushCard features because they go far beyond providing access to
electronic payments. We offer many services you don’t get with most cards, including:
- budgeting tools that really help people save money
- mobile and social media features
- card-to-card money transfers
- text alerts that notify you when you’ve exceeded the budget you set
- prescription drug and healthcare discount services
“RushCard’s practices are unfair because they charge people money to access their
own money.”
All financial services companies charge money to process payments
because it costs money to process payments. If your average checking balance is
over a certain amount, say $5,000, the bank makes money by lending out the money
from your “free” checking account and charging interest on those loans. However,
if your average balances are only in the hundreds of dollars, then the banks count
on you to bounce checks in order to make money on your account. In 2009 banks made
$38 billion in non-sufficient funds (NSF) fees and overdraft (OD) fees.1
These sneaky fees disproportionately hit the working poor, minorities, immigrants
and students. In fact, according to the FDIC, 92% of the $38 billion of NSF fees
collected by the banks in 2009 were paid by only 14% of the then “banked” population.
“Prepaid customers are paying too much for their cards.”
RushCard’s fees are competitive, the fee schedule is clearly stated on rushcard.com,
and card members can choose the plan they want and switch between plans whenever
they wish to suit their needs. Our application process even includes a fee calculator
that will tell our members which of our two fee plans would result in the lowest
fees for them. We also give our members tips on lowering their fees by doing things
like signing for purchases to avoid being charged for a PIN transaction or receiving
cash back with their purchases in order to avoid ATM withdrawal fees.
The real story is that customers pay too much for bank accounts. JP Morgan Chase
estimates that it costs approximately $300 per year to provide a checking account.2
The average cost to the consumer is $360 - $551 per year.3
Banks charge their customers too much and don’t do enough to help them.
“Prepaid cards don’t encourage saving and greater financial literacy.”
RushCard helps people along their path towards greater financial freedom. Our members
exercise their freedom every day by holding and managing all of their
money on their cards. With the tools that we offer—and the transparent fees that
come with them--members are saving money. These are reasons that card members stay
with RushCard an average of three years--much longer than any other General Purpose
Reloadable card. We encourage financial literacy by giving our members choices in
managing their money and the tools to help them understand their choices.
- [1] Bretton Woods Inc, 2009 Fee Analysis of Bank and Credit Union Non-Sufficient
Funds and Overdraft Protection Programs.
- [2] Analysis of Reloadable Prepaid Cards in an environment of rising consumer banking
fees, Bretton Woods, February 2011
- [3] Comparing cost of Prepaid vs Traditional Checking Accounts JP Morgan, September
2010