The REACH Card: Are Simple Fees Better?

The REACH Prepaid Visa CardAnother celebrity endorsed prepaid debit card was announced today. This time, the card is the REACH Prepaid Visa Card, and the celebrity is syndicated radio host Tom Joyner host of the nationally syndicated The Tom Joyner Morning Show, and also founder of REACH Media Inc., the Tom Joyner Foundation, and BlackAmericaWeb.com. Unlike some other recent celebrity endorsed prepaid cards, the REACH Card takes what seems to be a great approach to pricing. The fee structure is about as simple as you can get. We take a look at the REACH Prepaid Visa card here.

As the new website for the REACH Card asks “Why The REACH Card?”. The answer? “It’s the card you can trust at a fair price.”. While the card is not yet available, consumers can preorder the card (and if you order before January 20, 2011, you get “ELITE” status, whatever that entails…).

The site goes on to state: “The REACH Card has only three fees. Period. There are no hidden fees.”. We love simple, and we love cards with few gotchas. The fees of the REACH card include an activation fee of $9.95, a monthly fee of $8.95 and ATM withdrawal fees of $2.50 (plus any surcharges by ATM operators).

That’s it. No bill pay fees, no customer service fees. We love the structure.

The REACH Visa Card also comes with some interesting additional features (details of which are not yet available on the site), including a credit builder feature called the “PayFit Credit Builder”. The card is issued by the Bancorp Bank and is FDIC insured.

We think the simple fees are a great step in the right direction, and expect the card to do well because of the celebrity status of Mr. Joyner and the simple structure.

But how does it stack up against some of our favorite low-fee cards? Here’s a quick comparison of a typical month (not the first month, when the activation fee is involved, but a later month).

In the following, we assume a cardholder makes the following transactions: 5 bill payment transactions, 5 ATM withdrawals, 2 customer service calls, and 2 ATM balance checks.

REACH Card Comparison

Prepaid Card Average* Monthly Fees
The REACH Visa Card $21.45
nFinanSe Visa Card $11.08
Mango MasterCard $11.00

Comparison of the REACH Card to Other Low Fee Cards (* assumes monthly fee if any, 5 bill pay transactions, 5 ATM withdrawals, 2 customer service calls, and 2 ATM balance checks)

So, while simple fees are great, sometimes finding a card that matches a consumer’s buying and transaction habits can be even cheaper than using a prepaid debit card with low fees.

Nonetheless, we congratulate the REACH Card team for designing a product that appears to have very few gotchas or surprises. Check out their website here.

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