Q: I have bad credit and want a credit card. Is the Russell Simmons Rush Card a scam or ripoff? That’s what I was told.
A: Launched in 2003, it’s been around almost a decade now. But before we talk about what the critics are alleging about the Rush Card, review what it does and doesn’t offer:
What is it exactly?
If you apply for a Rush Card you will get a reloadable prepaid Visa card. This is not a credit card – you can only spend what you’ve loaded on it. This is not a bank account either – though it does offer a few bank-like services.
In a 2011 interview with Forbes, Russell Simmons reportedly said this about who the card is for:
“It’s not for the 60 million underserved Americans who cannot get a bank account, it’s for most middle class people. It’s half the price of, probably a Bank of America free bank account to operate.”
Is that really an accurate description of the Rush Card? Take a look at the fees below and decide for yourself. I have included what are probably the most common fees. There are others, like fees for international transactions, but for simplicity sake I will stick to those which are probably the most common.
Rush Card vs. Bank of America: Who’s Cheaper?
(pay as you go)
|Rush Card (monthly plan)||Bank of America (eBanking plan)|
|Setup Fee||A one-time fee of $3.95 to $14.95, depending on which card design is chosen.||A one-time fee of $3.95 to $14.95, depending on which card design is chosen.||none|
|Monthly Fee||None||$9.95||$8.95, but free when you enroll in paperless statements and use Bank of America ATMs to do your banking|
|Statement Fee||None for online statements, $1.00 per month for paper.||None for online statements, $1.00 per month for paper.||None for online statements, paper provided for no additional charge if you are paying the $8.95 monthly fee|
|ATM Balance Inquiry Fee||$0.50 each||$0.50 each||None at Bank of America ATMs|
|ATM Withdrawal Fee||$1.95 each||None for first 2 per month, then $2.50 each after that||None at Bank of America ATMs|
|Cash Deposit Fee||None from Rush Card, but their 3rd party load partners (MoneyGram, Western Union, and MoneyPak) typically charge up to $3.95 to $4.95.||None from Rush Card, but their 3rd party load partners (MoneyGram, Western Union, and MoneyPak) typically charge up to $3.95 to $4.95.||None at Bank of America ATMs|
|Direct Deposit Fee (i.e. payroll and govt. benefits)||None||None||None|
|Paypal Deposit Fee||None||None||None|
|Money Order/Check Deposit Fee||None, but mailing them in will require postage||None, but mailing them in will require postage||None, when deposited at a Bank of America ATM|
|Purchase Fee||$1.00 per transaction (with a max of $10.00 per month)||None if you press "credit" after swiping card. If you select "debit" and enter your PIN, you will be charged $1.00 per transaction.||None|
|Online Bill Pay Enrollment||None||None||None|
|Online Bill Pay Fee||None||None||None|
|Card Replacement Fee||None||None||$5.00|
|Plan Change Fee||None||None||None|
As you see, Bank of America still appears to be a much better deal than the Rush Card. I’m not sure how Russell Simmons came up it being “half the price, probably” unless he is making the assumption that account holders will regularly be paying overdraft charges, too.
What’s fact and what’s fiction?
Is there a Rush Card scam going on or is this a product that really will save money? Well in all fairness, if you don’t have a bank account and use paycheck cashing services instead, then the Rush Card can save money (versus chucking over a 2% to 3% fee every time you cash a check). Furthermore, if you frequently overdraw your checking account (and pay overdraft fees regularly) then the Rush Card may end up costing less than a checking account. So this card is not a “scam” or “ripoff.” The card is operated in a 100% legal manner and in their defense, they do disclose the fees upfront.
That being said, people heavily criticize it because of all the fees. Is it the most expensive prepaid card on the market? No, there are some others which cost more. But on the flip side, there are also plenty of others which can cost a lot less. For example, the American Express Serve (a prepaid card) has almost no fees if you are just looking for a reloadable card to make purchases with.
Rush Card fees
|Unlimited Plan||Pay As You Go Plan|
|One-time card-loading fee||$3.95 - $9.95||$3.95 - $9.95|
|Transaction fee||None||$1.00 for each PIN or signature purchase up to $10 max per calendar month|
|Card-to-card transfer fee||$0.99||$0.99|
|Out-of-network ATM withdrawal fee||$0.50||$0.50|
|Over-the-counter withdrawal fee||$2.50||$2.50|
|Maintenance fee||None||$1.95 except where prohibited by law|
|Paper statement fee||$1.00||$1.00|
|Expedited cash fee||$30.00||$30.00|
Your best bet, however, would be to get a low cost or free checking account and use the debit card that comes with it. Even if you have awful credit and have burned bridges with past bank accounts, there may still opportunities out there. Many banks offer “second chance” checking accounts for bad credit. Another option would be to go to a local credit union – many have lower fees than banks and are more willing to accommodate a bad credit history.
Written or last updated for November 205