Orman’s prepaid card being discontinued

CNBC personal finance guru Suze Orman‘s prepaid debit card is being discontinued, reports Ron Lieber of the New York Times.

Lieber writes, “Ms. Orman was particularly proud of this characteristic. She said she believed that it was not fair that people who borrowed money using credit cards got rewarded via the scoring system, but people who spent only what they had on a prepaid card did not.

“Cards like Approved do not currently influence the all-important FICO score, which is used to qualify for mortgages and other financial products. Improving that score can be important for lower-income customers who tend to use prepaid cards. A spokesman for TransUnion did not respond to messages seeking comment.

“In a video when she was introducing the card, Ms. Orman said that ‘you know I will do everything in my power to always tell you everything that you need to know.’

“But so far, Angel Luis Estrada Pagan, a cardholder in New York, said that all he had received was the letter from Bancorp stating that the Approved card was being discontinued. He asked a customer service representative when he might hear from Ms. Orman. The representative, he said, responded that Ms. Orman would contact cardholders after all the accounts were closed in July.

“Ms. Orman’s consumer-friendly tactics may have undermined the profitability of the venture, according to experts. At first, Ms. Orman had hoped to offer the card with no monthly fee at all, and it is possible that her customer-friendly $3 fee proved too low, given all the associated costs.”

Read more here.