That'll do nicely! American Express rolls out first prepaid card for the masses

By DAILY MAIL REPORTER
Updated:


Downmarket: The new American Express prepaid cash card

Downmarket: The new American Express prepaid cash card

Their gold and even platinum cards were once the preserve of the well-off, with the slogan 'That'll do nicely, Sir'.

But now American Express appear to have lowered their standards from its once famous luxurious image and introduced a simple cash card.

The financial company rolled out its first pre-paid card today as it moved to stake a claim in the growing industry.

The announcement marks a notable departure for the company, which is known for catering to a more affluent clientèle with its signature green charge cards.

Prepaid cards, which are often sold in drugstores and can be reloaded with cash, are usually marketed to low-income consumers who don't have credit cards or checking accounts.

But Amex is betting that its newest offering will find appeal among a broader swath of consumers.

'This card is for everyone,' said Dan Schulman, who was hired last summer to head Amex's enterprise growth unit.

'It could be for a parent who wants to give their kid a card, it could be for someone who doesn't have access to credit. It's a very large market that spans demographics.'

American Express says its prepaid card pares down the number of fees that users often encounter.

The Amex card charges two fees. To load money on the card at retailers such as Walmart and Walgreens, consumers pay $4.95. There is no fee to transfer money onto the card through a checking or savings account.

The other fee is for ATM withdrawals. Cardholders get one free withdrawal a month, and are charged $2 per withdrawal thereafter.

The simplified costs are in contrast to the long list of fees that can come with other prepaid cards. Some cards charge a monthly fee, for example, or $1 or more for every transaction. Other cards charge fees to speak with a customer service representative.

Upper crust: American Express gold, platinum, and black cards. Black cards were deemed the pinnacle of wealth

Upper crust: American Express gold, platinum, and black cards. Black cards were deemed the pinnacle of wealth

The Amex prepaid card can be ordered online at no cost. When it becomes available in retail locations later this year, the card will come with a purchase fee of about $5.

The Amex prepaid card builds on the company's PASS prepaid card, which was introduced last year as a way for parents to keep teens on a spending leash. But the company quickly realized prepaid cards had bigger potential, given their rapid growth in recent years.

Last year, Americans spent an estimated $37 billion on prepaid cards. That's twice as much as the previous year and four times the amount in 2008, according to the Network Branded Prepaid Card Association, an industry group.

Consumer advocates warn against prepaid cards, however. They say that consumers with limited means would be better off with traditional checking accounts, where fees can be avoided altogether as long a minimum balance or other conditions are met.


 

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