Get the Facts: Walmart’s AmEx Bluebird Prepaid Card


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Thursday, October 11th, 2012

There’s been a lot of noise after American Express and Wal-Mart announced their new Bluebird Prepaid card earlier this week, including many praises for its low fees and new features.

Fox News frames prepaid cards as a threat to banks, as more consumers choose prepaid in lieu of their bank accounts and debit cards.   Business Week declares “Walmart’s New Prepaid Card May be the Best Deal Yet” with its low fees and added features.

While it is true that the Bluebird card will have some of the lowest fees in the prepaid card market, and provides convenience features to its users that aren’t available to many bank customers- like the ability to take a picture of your check to make a deposit- there are some key attributes that still make the Bluebird card inferior to a debit card tied to a traditional bank or credit union account.  NPR’s recent story summarizes some of these points here.

1.  Bluebird does not develop a relationship with a bank.

This might not be important for all consumers, but having and maintaining a relationship with a bank remains a critical to establishing your financial well-being.  Bank customers will be able to point to an ongoing relationship when they need to obtain a loan.  Bluebird prepaid cardholders won’t have this access.  Credit Union Times further highlights this gap.

2.  Prepaid doesn’t build or repair credit.

The industry and credit bureaus have been trying to determine whether or not prepaid card activity can be used to build or rebuild credit.   Suze Orman’s the Approved Card’s Credit Project is one approach at making this happen, but results are not in.

3.  Funds are NOT FDIC insured to the prepaid cardholder.

Funds loaded onto Bluebird prepaid cards are likely not held in a bank on behalf of the cardholders.  Adam Rust at BankTalk makes an important point.  “Everyone seems to have forgotten an important thing about American Express prepaid debit cards. They cannot accept a federal benefits payment.” The Deparment of Treasury found FDIC insurance important enough to make a requirement that federal benefit disbursements to prepaid cards can only be made to those with FDIC insurance.

Bottom line:  there have been many accolades as to the pricing of the new Bluebird card and the features the card will provide, but there are still some fundamental differences that sets this prepaid card apart that make it an inferior product overall compared to a traditional debit card tied to a bank account.   


One response to “Get the Facts: Walmart’s AmEx Bluebird Prepaid Card”

  1. Paula Trigg says:

    On February 7, 2018 I had money stolen from my card. I called as soon as I found this out. A dispute was filed. After many telephone calls over many days, and very rude unhelpful custeromer service reps, I was told that it could take up to 45 business days for my money to be returned to me. I even had a customer servie rep ask me, “Well what do you want me to do about it?” I finally contacted the merchant where the card was used and they refunded the money to my account. I shouldn’t have had to do that.
    On February 13, 2018 I sent a payment through their bill pay to my landlord to pay my rent. There should have been no problems…..right?
    On March 1 I found out from my landlord that they had not received the check. I called Bluebird and asked if I put a stop payment on the check how long would it take to get my money back The man said within the week. On March 2, 2018 I contacted Bluebird again to put the stop payment on the check. I was told I would receive my money by March 6, 2018 by 9:00 a.m. eastern time. Well, It was not there. So I called the afternoon of March 6. I was on hold to talk to a supervisor for 32 minutes I had to call back and then was assured that my money would be back in my account the next day. It was not there. I called again. I was put on hold for 45 minutes. I was told that the dispute resolution team could take 4 business days to render their decision and then the moeny would be back in my account, and that I needed to look for an email from the dispute resolution team in my email, and respond to it. I was on hold for 45 minutes. No email today. No money. When I called today I was put on hold for a supervisore for over 15 minutes. I had to hang up an call back. Ann answered the phone the second time and at this time told me that the dispute resolution team had up to 10 business days to investigate, and it could take 45 days to get the money put back in my account. In the meantime I am facing eviction for my rent not being paid by March 1st. I was assured on more than one occassion that it would not take 45 days for the stop payment. There is nothing to investigate. A paper check was sent, it has not been cashed or deposited. It will not be cashed or deposited. I need my money back.

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