Comedian George Lopez is the latest celebrity to back a prepaid card.
Mango Financial, a prepaid card company based in Texas, said Wednesday that it inked a deal with the sitcom star for a multiyear marketing campaign targeted to the unbanked, or those who don't have relationships with traditional banks.
Prepaid cards work like debit cards but are not connected to checking accounts. The cards are a way for those without bank accounts to avoid carrying cash and make payments online. Issuers say the cards offer a cheaper alternative to checking accounts, which often charge monthly fees unless customers maintain a set balance. Issuers also note that customers can rack up steep overdraft fees with checking accounts.
But the cost of a prepaid card can vary significantly as well depending on the card and how it's used. Consumer advocates criticize the range of fees on some cards that they say surprise customers, including fees to speak with a customer service representative or make purchases by punching in a PIN code.
Mango touts its simple fee structure, along with the additional features its card offers, including an option to deposit money into a linked savings account.
The Mango card charges a $5 monthly fee, which is reimbursed if cardholders load at least $500 onto the card. Customers are also charged a $2 fee for every ATM withdrawal. That's on top of the fee charged by the ATM operator, which would bring the cost of a withdrawal to about $4 or $5. A balance inquiry at an ATM costs 50 cents. It costs $5 to reload the card with money and $10 to close the account.
The announcement comes just weeks after financial guru Suze Orman introduced a prepaid card in January. Hip hop mogul Russell Simmons offers the RushCard and has partnered with Yankees shortstop Alex Rodriguez for a version of the card.
The Kardashian sisters of reality TV cut ties with a prepaid card they endorsed after the card drew heavy criticism for its high fees. That card cost $60 just to buy and use for the first six months, even before cardholders loaded any money onto it.