What’s Behind the Magic Prepaid Card

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By Consumers Union on Wednesday, June 27th, 2012

 

There’s another prepaid card on the market today, the Magic by Magic Johnson prepaid card., issued by OneWest Bank.   We found the fee schedule to be fairly straightforward.  Here’s a quick summary:

 One-time set up fee:  $4.95

This fee is waived if at least $50 is initially loaded onto the card.

Monthly fee: $4.95

This fee is waived after the 2nd qualifying direct deposit of at least $250.

Getting cash from an ATM:  Depends (Free to $2.50 + ATM owner surcharge fee)

If you use an In-Network ATM (ATM owned by the issuing One West Bank), it’s free.  Otherwise, the cardholder will    get one free ATM withdrawal per month.  After that the Magic card assesses a $2.50 in addition to any ATM owner surcharge fees.

Adding Money: Free to $4.95

Like other prepaid cards, direct deposit and transferring funds from a bank account are free.  It will cost others $4.95 to load funds with a reload pack (such as the MoneyPak).

More on Fees:  There are a couple fees that may catch some cardholders by surprise, such as the $0.50 “transaction denial fee,” or a declined transaction fee.  Calling customer service is free once a month, after that, it’s $2 a call.  Bills can be paid online, or by phone, to merchants and vendors who accept card payments.

Savings Option:  The Magic Prepaid card also launches Magic Mojo in partnership with Piggymojo, which can make saving more fun for some.  Cardholders set a savings goal, send a text about forgoing a purchase and the amount which is then transferred to a Magic Mojo goal account.  We are curious to see how many cardholders will use this new feature and hope that it will help consumers put away some money, whether as a rainy day fund or to fix a car.

What do you think of Magic Mojo or Piggymojo? 

One final tip to keep in mind:  If prepaid cardholders (this applies to debit cardholders as well), use the card to rent a car or book travel reservations, there may be holds on money that goes beyond the actual amount for “up to 60 days” in the case of the Magic Card.  This is called a debit hold or “authorization” hold.  So, if you’re relying on that extra amount that’s being held, you should be aware that it may take some time to be able to use the money, or you should explore other ways to avoid the hold.  For instance, if you use the card for gas, swipe the card with the cashier instead of at the pump.

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