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Justin Bieber will promote a prepaid debit card via social media and develop a series of videos that will promote responsible spending.
If Justin Bieber endorses a product, will teens buy it or convince their parents to get it for them? BillMyParents, a financial services company focused on teens, is banking on it. They’ve signed a deal with the pop star to endorse a new prepaid debit card to his legions of loyal fans.
With 50 million Facebook fans and more than 32 million followers on Twitter, Bieber has enormous marketing power. As a “brand ambassador” for the SpendSmart card, the 18-year old performer will promote the card via social media and develop a series of videos that will promote responsible spending.
“By combining our new teen prepaid debit card with Justin's vast reach and financial educational materials, we can empower countless families with teens to think about responsible spending in a new and better way,” said Mike McCoy, chairman and CEO of BillMyParents in a news release.
Beiber will become the face of a new version of the SpendSmart card. BillMyParents has not announced a launch date for when that marketing campaign will begin, but its public relations firm said it should happen in a couple of weeks. At that time, the SpendSmart card will get a new design, but the product features and pricing will stay the same.
SpendSmart is a prepaid debit card that can be used anywhere MasterCard is accepted. Like most prepaid cards, it has a long list of fees:
- Monthly fee: $3.95
- Loading charge $0.75 to add money from a checking or savings account; $2.95 from a credit or debit card
- ATM charge: $1.50 per withdrawal; $0.50 per balance inquiry
- Inactivity fee: $3 if the card is not used for 90 days
- Replacement fee: $7.95 if the card is lost
Is this card right for your teen?
“The good thing about a prepaid debit card is that you cannot go into debt,” noted Gerri Detweiler, personal finance expert at credit.com. “You can only spend what’s on the card, so for that reason it’s a great way to manage an allowance.”
And this Bieb-endorsed prepaid card gives parents maximum control. They can sign up for text alerts every time the card is used or download a smart phone app that makes it easy to track the balance and see individual purchases. Parents can also temporarily freeze the card if they don’t like how the money is being spent and permanently block it from being used at some retailers.
But there are other factors to consider.
Bill Hardekopf, CEO of lowcards.com, doesn’t like most prepaid cards in general and questions the educational value of this card.
“I’m not sure a prepaid debit card really teaches financial responsibility,” Hardekopf said. “I don’t know if this is the right way to go for a young person.”
John Ulzheimer, president of consumer education at SmartCredit.com, points to that monthly fee, which adds up to $47 a year. He doesn’t like the idea of teaching teens it’s smart to pay a fee to use your own money.
“That’s a very dangerous message to send a young person who is basically at the beginning of their consumer credit lifecycle,” he said.
Ulzheimer said it makes sense to pay an annual fee of $50 to have a credit card with a $25,000 limit because it gives you access to someone else’s money. But he said it is “unreasonable” to pay almost that much for a debit card where no credit is extended.
Heartthrob singer Justin Bieber sings the song that catapulted him to stardom in 2010, "Baby," for fans on Rockefeller Plaza.
Financial experts point out that prepaid debit cards do nothing to create a credit history or build a credit score because these transactions are not reported to the credit reporting agencies. To do that, you’d need to get your child a low-limit credit card, something you can control as the co-signer.
“I like the idea of giving a young person a credit card with limits on it,” Ulzheimer said. “It’s almost like a credit card with training wheels. And teach them the proper way to use it, so when they’re out on their own they understand there’s a right way and a wrong way to manage credit.”
The hot new plastic
Demand for prepaid debit cards is skyrocketing. According to the Mercator Advisory Group, $57 billion was loaded onto these cards in 2011. That’s expected to top $168 billion by 2015.
These cards are popular with people who don’t have or don’t want a bank account or who can’t get or don’t want to use a credit card. They’re endorsed by big name celebrities, such as Suze Orman, Magic Johnson, LilWayne, Russell Simmons, Alex Rodriguez, and George Lopez. And who can forget the Kardashian Kard, launched in 2010, with fees so high it was quickly pulled off the market?
Right now, there are no government regulations on prepaid card fees, so the companies that issue them can charge whatever they want.
The bottom line
The SpendSmart card is less expensive than some prepaid debit cards on the market. And it does have some nice parental control features. But there are money-saving alternatives.
The new Bluebirdcard from American Express and sold by Wal-Mart, can be used fee-free if you stick to in-network cash machines.
The Chase Liquid prepaid Visa debit card is another good choice. It has a flat monthly fee of $4.95.
The Kaiku Visaprepaid card is free – there’s no cost to get it. The monthly fee is only $1.95 and you can use any of the 50,000 ATMs in the Allpoint network for free.
And there’s always a conventional debit card that’s linked to a checking account. It can be used fee-free, aside from any bank charges for the checking account.
“Maybe the lesson to teach your kids is that just because it has a celebrity name on it, doesn’t necessarily mean it’s the best product for you,” said financial expert Gerri Detweiler.
More information:
- Consumer Reports: Prepaid Cards: Plastic That’s Less Than Fantastic
- Bankrate: Pros & Cons of Prepaid Debit Cards
- SmartCredit: Why Isn’t My Prepaid Debit Card on My Credit Report?
- ConsumerMan: The Truth Behind Suze Orman’s New Debit Card
- ConsumerMan: Prepaid Cards Might Not Be So Bad for Those Who Overdraft
Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.
Pop star Justin Bieber, who has sold over 15 million albums worldwide, sings his hit that's number one on iTunes, "Boyfriend." The song's video has been viewed on YouTube over 44 million times.
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Most parents these days seem to feel it's their job to provide anything their kids want, no questions asked, so it'll probably be a huge success.
what a joke
The name, "Billmyparents" is enough to turn off a huge percentage of parents, me included. Justin Bieber as it's spokes person just guarantees that I will not be purchasing any of his products, ever.
What a bunch of fees! It's great for Bieber, and great for the credit card company but horrible for holding down costs.
This Bieber kid has no talent, no judgement, and displays a lot of the nerve and "entitlement" of his generation. It is no surprise he would be endorsing this product.
In a perfect world, people wouldn't buy something because he endorsed it. And its a bit ironic that he is endorsing something he would obviously never use himself.
Once people finally realize what a douche this dude is, I'm sure he will be spit out the bottom of the gay porn industry, where he belongs
This debit card brainless idea is a match made in Heaven with the no-talented brat Bieber. I can't believe all the publicity and adoration this hollywood creation has received. Shows you the general degradation of our entertainment society.
Baby Bieber is not an example that any parent let should let their kids follow. He has been banned from several big name hotels for his partying and destroying suites, causing the police to be called in several times. When he was a guest on SVU the crime show the staff could not wait for him to leave the stage as he was very demanding and very hard to work with. One worker described him as a spoiled rotten little brat who thought he was better than everyone there. This punk needs to go back to Canada and learn manners and actually develop some talent before he claims he is a star. Canada please take him back and do not let him out of the country ever again.
If you can't pay for it up front, then you can't afford it, and shouldn't buy it - period. Save up for it, then buy it. Go to a bank, open a checking account, and get a debit card for the account. When the account is empty, you are broke. Manage your money, and you won't run out. Don't buy things you can't afford, and save up. That way, you'll have money when something unexpected happens, and you won't have to borrow just to buy tires for your car.
LAME when you hear the words BILL MY PARENTS and CREDIT/DEBIT card it screams to kids.. Go shop and your parents will pay for it.... I wouldnt get my kids one....
I read it as Bieber saying that his parents would pay the bills !
....how about telling these kids to find a job and earn some money working like most people have to do to buy something they want or pay their bills....this card idea is dumb and unnecessary.....so I guess that's why it will end up being popular with American kids, right?..kids should stick to cash at least until they learn the proper way to make change....
no body cared
we all just got on with our lives
there is something fundamentally wrong with this kid; what white boy hangs around 40yo black men?
I just don't get it.
Looking at the card, and all the little add on fees, I would have to say no if my child was ever to ask for such a card.
I'd rather open a bank account for them, get them a debit card and put locks on it so they cannot spend more than they have. So no overdraw fees, and such. You can tweak bank accounts easily anymore, and if you want to teach them proper money management, this would be a better idea verses the billmyparents crap.
Yea, gave all my kids the the newspaper years ago and said "there you go.you want money check the classifieds and get a job. If I had a kid now I would go to the computer and pull up get a job .com . Wow, I guess things arent that differant in the 21st century!
I realize that every generation has their stars and idols and I am from the Beatles, Rolling Stones generation so I don't pay much attention to Bieber, but what is with his new hairdo and those bug eye sunglasses.
Attracts more Pervs????
I try not to talk bad about the kid, but this is complete and utter scumbaggishness, and will not hesitate to do so now.
These idiots want to talk about teaching kids responsible spending, and managing credit, well neither of those two things involve a prepaid debit card which is tantamount to gouging the in the amount of fees it imposes.
A 90 day penalty if you don't use the thing? That's responsible? If you don't have anything to buy, you better buy something random or else we're gonna charge you for being responsible with your money.
Strip these people of citizenship and get them the F out of the county, and as Bieber is already not a citizen, deport his effeminateness back up north eh.
moneychanging scum promote this crap.
I am so sick and tired of seeing and hearing about this child. Why won't he go away!
Justin Bieber has just any respect I still had for him. The card preys on people with exorbitant fees and does NOT "empower countless families with teens to think about responsible spending" because paying so much in fees is NOT responsible spending.
Soon to your iPhone, you new swoon.
Justin Bieber, Payme lyrics
my friends are so impressed when i whip out my mastercard, remember the old ad with Jason R. " mastercard I'm starved ". Damn right.
just don't get it,the banking/credit card industry are taking your money,charging you fees that lower the buying power of the card,give the kids cash and the banks get screwed,then you also avoid speaking to a foreign country where the bastards have out sourced american jobs so they profit more.
Well said Hot-in-Miami
It's just not BillMyParents it's BillMore.. w/ extra fee each time you load money; crap. Parents are there to purchase. This card is useless. It's already a pain w/ overwhelming gadgets in the market. Teens just want Beats By Dre and nothing else. Their wishes are costly and w/ this extra fee crap cards; they can never get a chance of learning the value of $. I wish they get Bills in hand and they know what they are spending.
It is a huge market. With the financial collapse millions of people have bad credit so its their only option. The really solution is to clean up your credit to get a credit card. The best way of doing this is get hire a reputable and established credit repair company like Lexington Law.