There has been a fair amount of media attention over Bill My Parents’ new spokesperson, Justin Bieber and their new prepaid card, “SpendSmart.”
SmartCredit.com’s Consumer Educati0n President summarized his point of view on a recent Fox News Business report. His opinion certainly once again begs the question of why should or would a consumer choose a financial product because of celebrity endorsement.
In this case, we hope that parents make the right decision for their children and for their own finances-and to look beyond the celebrity. Does it make sense to pay at least $3.95/month for the SpendSmart card, or are they better off obtaining a traditional debit card, or choosing a different prepaid card? Are there sufficient disclosures and resources to help parents figure out which product work best not only for their own finances, but also provide sound guidance to their kids about how to use or manage their money wisely?
We have repeatedly recommended that consumers obtain traditional bank products over prepaid until proper consumer protections are guaranteed by federal law. While there is plenty of innovation happening in the marketplace today, a checking or savings account from a bank or credit union still remains the best way for a consumer to lay down the foundations to a financial history.