Over at Huffington Post, Ryan Mack posted an open letter to Russell Simmons asking him to discontinue selling his pre-paid debit card. Mack correctly praises Simmons for the work he has done to promote financial literacy to the Hip Hop generation through his Hip-Hop Summit Action Network.
Still, despite his previous good works, Mack denounces Simmons’ pre-paid debit cards because
[t]here are other more efficient means to empower those in our communities than pre-paid debit cards and other financially destructive establishments such as check cashing facilities. The typical bank offers free debit cards that if used properly do not have any fees affiliated with them and can be used for the same purpose as the pre-paid debit cards.
If we compare the fees affiliated with the Rushcard compared to the typical bank offered debit card, we can clearly see the advantage of the cards offered by the banking institutions.
Rushcard vs. Typical Bank Card
Activation Fee: Rushcard = $19.95 Typical Bank Card = Free
Convenience Fee: Rushcard = $1.00 Typical Bank Card = Free
ATM Cash Withdrawal: Rushcard = $1.95 Typical Bank Card = Free (At Branch)
ATM Balance Inquiry: Rushcard = $.50 Typical Bank Card = Free
Bill Payment: Rushcard = $1.00 Typical Bank Card = Free
Inactivity: Rushcard = $2.95 Typical Bank Card = Free
Refund of Rushcard/Bank Card via Check: Rushcard = $5.00 Typical Bank Card = Free
As you see, there is no financial reason for one to choose the Rushcard over a typical banking institution which offers debit cards as a part of their services.
While I agree with Mack’s critique of pre-paid bank cards and check cashing services, I feel the need to amend his last sentence. There certainly is a financial reason for Simmons to lend his name to this destructive product: if it catches on, he’ll get paid. Mack’s sentiment only makes sense if we assume that Simmons cares about Blacks and Latinos beyond their ability to consume the products he advertises to them. I see no reason to make such an assumption.
We have to remember that we are talking about the underbanked, a group, comprised mostly of urban Blacks and Latinos, whom the financial industry has long been looking to exploit. There’s exquisite synergy between Simmons and whatever firm is backing this venture. Simmons uses his activist reputation to drive sales of a cancerous product and they laugh all the way to the check cashing service bank.
Mack is too polite to say so, but Simmons attitude here seems to be reminiscent of another talented New York businessman who resolved to make money by marketing a destructive product in his own community:
You know what they say: its business, its not personal.
Except, in Russell Simmons case, its both.