Jan 15

This Roundup will be different than most. It’s about one topic, one incident, one lesson. It also takes a bit of introduction. As I drove my daughter to basketball practice today I started to tell her about the events of these past few days. First I had to explain who Suze Orman is. She’s an author of finance books (“oh, dad, like you’d like to write one day.” Yes, sorta like that.) and she has a show on CNBC (“oh, like Kudlow.” Hmm. No nothing like Larry. Her show takes questions from people that call in and she helps them.) So far so good, She recently offered a card. A pre-paid card, yes, like the gift card you’d get, but you can use it anywhere that takes a credit card. (That’s stupid dad, who would want that? Is this for kids who can’t just use their credit card like you and mom? No, it’s aimed at adults.) Well, there was no selling this idea to my Jane 2.0, and that brings us to Thursday night. My fellow finance blogger (and host of the financial blogger conference I attended in October) Phil Taylor at his site PT Money posted an article What We Need from Suze Orman Instead of Another Celebrity-Endorsed Useless Prepaid Debit Card. It seems another blogger tweeted about it and Suze reacted.

Her tweets about this article included the above screengrab from a video at Fox Business, Suze Orman’s Card Backlash. Note that Fox appears to show some respect calling those Suze slammed “money experts.” Good move, it takes a long time to conclude whether an author is worth reading, and of course Suze fast visceral response was just wrong. Eventually she apologized, but the damage was done. As far as I’m concerned, she’s there with the rantings of Mel Gibson and Michael Richards, but not quite at the level of Kanye West’s faux pas. Now, the rest of the roundup.

Even Times Author Ron Lieber wasn’t too gung ho on the card. The Approved Card: Uses for Suze Orman’s Plastic. He does point out, as my daughter did, the card may be useful to give to a child to use as a preloaded card. Although my local mall sells these for $1.50 and no cost each month. (The mall call is a Visa, and it’s used like a credit card, anywhere Visa is taken.)

Stephen at Nerd Wallet posted Suze Orman Loses Her Sh*t on Twitter. More than a recap, Stephen dug up some of Suze’ responses to tweeters asking about such cards. All her replies were in favor of using secured cards instead.

Lazy Man and Money posted Suze Orman’s Pre-Paid Debit Card Scam. Before you dismiss this as a false accusation, remember, there’s no credit involved and the idea that it will help your credit report remains to be seen. Appropriate to add here, Suze is working with Transunion to see if the spending data can be used to help one’s credit. At present, it’s a science experiment, which is clear if you read the fine print very carefully.

At Beating Broke, Suze Orman Releases Prepaid Card. Wait, What? A level-headed discussion of the card’s features, and disappointment in Suze for her rant.

20 and engaged gets the prize for her Suze Orman’s “Approved Card” Gets Denied; Thinks PF Bloggers Are Idiots or at least for the fact that it was her tweet that Suze responded to which started the ruckus. Briana gives a great overview of the tweets Suze sent during this time. You’d think she’d have a bit thicker skin.

Elle at Couple Money (not to be confused with Elle, one of my readers and sometime guest poster, more about her later) posted Suze Orman’s Approved Prepaid Debit Card Causes a Stir. Elle is kind, “For those with limited banking options or those who have bad credit, the card may work for them.” I agree, this card may have limited use. For a very few people who can’t even get a debit card from their own bank. Yes, Elle, I was shocked at Suze rant.

Miranda Marquit at her Planting Money Seeds wrote Even if Suze Orman’s Name is on the Card Prepaid Debit Sucks. Miranda doesn’t leave us wondering “so what do you really think?” No, sir, “While the Approved Card is less crappy than other prepaid cards, it still sucks.” Yup, that’s right on target.

The Mighty Bargain Hunter gives us My two cents on Suze Orman and her prepaid card. Here’s one of the most balanced discussions, kudos to my friend MBH. Best line? “This can’t be taken from her: She’s done well for herself on this earth by helping a lot of people.” And I’ll concede, this is probably so.

Jeremy Vohwinkle helps us understand the fees this card has with his article Suze Orman Shows True Colors With Her Approved Prepaid Debit Card. Wow. Those dollars do add up. He also talks about the experimental nature of this card and the work with Transunion behind the scenes.

At Graduated Learning: Life after College, The Approved Card? More like the DIS-Approved Card! An insightful post concluding “I just think that this is a bad move on her part, using her fans’ trust for financial gain.” Yes, indeed.

Cash Flow Mantra exclaimed Suze Orman, WTF?! (to be clear, the acronym stands for ‘Why the fees’?)  ’nuff said

Jim Wang at Bargaineering doesn’t mince words with Why Suze Orman’s Approved Prepaid Debit Card is Terrible. Jim wonders why celebrities don’t learn from each other’s mistakes. Me too.

And last, really, At Make Spend Save Invest,  Is Suze Orman’s Approved Prepaid Debit Card Right For You? Some more details about the card itself, but the same conclusion, “no.” As many of us believe, a secured credit card is the way to go for those who cannot qualify for a real card.

Now to end this already too long post, about my reader Elle. When I first started blogging about three years ago, Elle knew me from a Usenet group misc.taxes.moderated, where not long ago, I was made an honorary moderator. At my blog I posted an article in which I was, shall I say, unkind to Suze. Elle called me out on it, suggesting that name calling and unkindness didn’t suit me (in so many words) and I took her note to heart. I apologized to Suze on my blog, and edited the original article. Since then, I’ve stuck to the facts, and refrained from nasty name calling, or at least tried to. And I’m grateful to Elle for her kindness and support. If you, my reader agree with everything I write, that’s ok, but I won’t grow from that. I hope my readers will continue to challenge me, question me and teach me a lesson now and then. In return, I promise to listen, and to never call my readers anything but friend. To call someone an idiot without knowing more than the fact that he doesn’t like your card isn’t saying much, it’s just overreacting. As many have said, Suze, in fact, has helped many, and I’m willing to cut her some slack, but she needs to know one thing. The financial realm contains many finance bloggers, and combined, we have millions of readers from all walks of life. We have different opinions, and disagree on some issues, but we are far from idiots. And our readers know us from our work. Most of which is done for the love of finance, not to push any product.


 

 

 

written by Joe

12 Responses to “A Sorry Suze Roundup”

  1. Briana @ 20 and Engaged Says:

    Thanks for including my post Joe, and even the screenshot haha. After all that jazz, I wonder how long the “Approved Card” will last.

  2. JOE Says:

    If only for a few days, you got the spotlight. That screenshot was from Fox News, you made the big screen. I agree, the card has little to offer.

  3. youngandthrifty Says:

    That is so cool that Briana from 20 and Engaged’s name was on FOX NEWS!! How awesome is that.

    If I ever saw my name on TV I would be floored!

    Great round up- poor Suze! I didn’t think she would be so snarky and defensive like that!

  4. cashflowmantra Says:

    Wow! I had no idea this whole thing made TV.

  5. Elle Says:

    ;-)

    I figure Ms. Orman melted down partly from all the attacks that I think were rooted considerably in sexism in the past. That’s just my two cents, folks. She lost her cool. Bad Suze.

    But –

    I am not going to throw out the baby with the bathwater anymore than I would in the case of Dave Ramsey, whose insistence that it’s all about being a good Christian is, in my view, insulting, condescending nonsense, especially to real Christians. I steer interested acquaintances to both Suze and Dave for their problems getting debt under control. I would send them to Joetaxpayer, too, but I do not think he has the infrastructure (yet) to support the likely enormous fan base. ;-) Luv ya, Joe.

  6. JOE Says:

    LOL. I love you too, Elle. If I quit the day job to move to finance in a real way, you’ll be the first reader to know.

  7. Elle Says:

    Just read the two, New York Times Ron Lieber columns on Orman’s pre-paid debit card. Her rationalizations for marketing this card are, as others have rightly pointed out, tiresome. Maybe, as Joe, Ron and others also point out, her card serves a small sub-population that cannot for some reason have a bank account. Still, I am not convinced the card is about much more than making Orman a buck.

    I know Ramsey, Clark Howard, bloggers and others have their money-making schemes. E.g. Ramsey’s “Financial Peace University”; Clark Howard’s books; some bloggers’ advertising. But I do not think any of these schemes rise to the same level as Orman’s card. Like folks are saying.

    I also object to the promotion of any effort to raise credit scores. The latter appears to be one of Orman’s selling points for using this card. This promotion obfuscates the fact that, to raise one’s credit score, one must take on more debt (paying it off regularly). Why promote debt? I understand that higher credit scores reduce the interest on a home mortgage. Still, some care should be taken when promoting higher credit scores. The focus perhaps should be on eliminating failure to pay bills rather than creating new debt (even if only short-lived debt).

    Lastly, my annual rebate from my credit card arrived this month. Eighty-one dollars. Nice. I pay the balance off each month and never have interest. I know I pay for my credit card through the machinations of my merchants and the card companies. Still, imagining people buying Orman’s credit card without exploring all other options disturbs.

  8. JOE Says:

    Elle – I know the FICO concern is troublesome to many. The same folk who can benefit from a better score are risking getting hurt by using credit when they shouldn’t. In your case, using the card and paying in full each month, you have a bit of benefit, improved FICO, and no cost or risk so long as the money is there to pay in full. This is beyond many people.

    I heard Suze talk on CNN’s ‘Your Money’ and she discussed the idea that she’d offer data to Transunion, to see if they could use it to help people’s scores. I try to never say never, but I am hard pressed to understand how purchasing the card with say, $500, spending it down over a few months and reloading can be translated into anything that helps one’s score. It appears Suze is selling hope for $3/mo while the real solution, a secured card, is probably what these people need. The entire target market is one that should follow Dave’s advice and go 100% cash, period. When I take issue with Dave, I simply state that I think the top X% (10? 20%) of card users, benefit and are better off with their cards. In this case, Suze is targeting the people who are most desperate and I say “shame on her.”

    As always, thanks for sharing.

  9. Elle Says:

    Hi Joe, I could be completely wrong, but the picture I have in my head of the best candidates for Suze’s debit card are those who (1) cannot get even a checking account; and (2) have a huge paycheck to cash each month, cash it somehow locally, but don’t want to have all these bills in their pockets (inviting muggers). I believe if one declares bankruptcy, for example, it is hard to get even a new checking account. The 100% cash route may not work.

    I saw the part about Orman’s card giving access to credit reports and her campaign (which itself seems fatuous) to cause debit card use to benefit one’s FICO. I am not buying this to be her main motivation. If it is, it’s an awfully long route to take to get to helping people.

    But I admit I have not studied this thoroughly. I just about don’t want to. It’s too much like drinking the Kool-Aid. In this case, the Kool-Aid of one individual trying to control others so as to make a profit. Lieber is very polite in his columns on the Orman card (and I presume elsewhere) and let’s the facts, and Orman’s feeble defense, speak for themselves and itself.

    I am lucky not to have to care about my credit score. I think FICO etc. is a racket. My stomach turns a little every time I hear a friend equate a high credit score to meaning they are good with money. (I get the same sick feeling when a friend proudly says he or she put down less than 20% on a house.) The FICO gives no indication of whether people are saving for retirement, for one.

    As you know well. I doubt I am doing this subject justice.

  10. JOE Says:

    It was my understanding, of course I may be mistaken, that one can get a secured card regardless of past issues, after all, the card would be fully secured, you put up $1000, and then have a limit just to this amount.
    I was unaware that bankruptcy negates your ability to get a checking account.

    I do agree FICO is a racket. I’ve written about the components of the score, and most can be impacted by even responsible behavior. “Average age of credit” for one. If I cancel old cards for whatever reason and get ones with better benefits or lower cost, I just trashed that portion of my score.

    I’ve written how about a year back, I got a zero percent transfer offer, and sent $15,000 to my 5% mortgage. In the end, I saved $700 over the year, as there was a maximum $50 fee. Now, with the median family income at $50K or so, this is more than 3 days pay for one transaction that was effortless. But it cost me a few FICO points. In July, I refinanced my rental property, again I saved money, and took a few years off the end of the loan. About 10 more FICO points lost. I made sure I was still in good shape for my home’s refinance this month. I am down to 3.5% on a 15 year mortgage. But my score reflects 4 credit inquiries over the last 2 years, giving me a “C” in that category. 7 would be a “D” so for now, I don’t care.

    Even as I write this, I realize, I have been drawn into the game.

  11. Elle Says:

    Thank you in particular for sharing the history of how refi’s, new credit cards, and inquiries affect one’s FICO. It’s really interesting.

  12. End Wage Slavery Says:

    What I don’t like about Suze Orman is that she is completely unrealistic on meta issues regardless of what she might have to say about individual finances.

    Her advice to people who don’t like slaving away for an exploitative wage? Become your own boss! Great idea! Why didn’t they think of that? Maybe because your average wage slave doesn’t have $5 left over after paying his bills for the month let alone enough money to start their own business? Maybe because a wage slave is highly unlikely to get approved for a small business loan?

    It’s like she sees what a massive pile of crap capitalism is, how it is more one-sided than a Moscow show trial in the ’30s and how it can’t survive without taking advantage of the vast majority of people but yet she still can’t bring herself to advocate raising the minimum wage to make it a living wage or something radical but necessary like transferring the ownership of businesses into the hands of their workers which would truly be the only option if we want to put an end to the exploitation of the average worker. She can’t bring herself to rip off the band-aid all at once and instead offers idiotic non-solutions that don’t bear any relation to everyday reality because offering such solutions doesn’t threaten the capitalist status quo. Get some guts Suze! Capitalism is a spectacular failure for the average person. You already realize it. Now come out and say it and offer some real solutions.

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