Walmart and American Express have teamed up to offer the new Bluebird card. They say it should help people avoid the high fees on checking accounts and debit cards.
Walmart and American Express have teamed up to offer the new Bluebird card. They say it should help people avoid the high fees on checking accounts and debit cards. - 
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Fewer fees mean more customers. That’s the hypothesis behind a new prepaid card called Bluebird. It’s the product of an odd-couple partnership between elite financial services company, American Express, and populist low-cost retailer, Walmart.

What makes the Bluebird card different? In a word: Fees. The prepaid card promises no minimum balance requirements, no monthly fees, no annual fees, and no overdraft fees.

Dan Schulman with American Express says, “Last year, banks charged $31.6 billion in overdraft fees. And according to a recent Bank Rate study, the minimum balance average to avoid a maintenance fee is now $723.02. That’s up 23 percent from last year.”

He says the typical non-interest-bearing checking account now has an average monthly maintenance fee of $5.48, a rise of 25 percent from last year and a record high.

“Checking accounts that were once free often now come with fees that add up fast. In fact, according to an independent study by Bretton Woods, consumers now pay an average of $259 a year for basic checking services. That cost is rising due to the rising minimum balance requirements and a growing list of fees being added to these services,” says Daniel Eckert, vice president of financial services for Walmart.

Amy Traub is a senior policy analyst with Demos, a public policy research and advocacy organization. She is not familiar with the new Bluebird card. But she agrees that some prepaid cards come with hidden fees.

“One reason consumers turn to prepaid cards in the first place is because they’re wary of the fees associated with having a bank account,” says Traub. “But prepaid cards can then have fees of their own, and often they’re not well disclosed. So you could be charged with a prepaid card just for checking your balance.”

She says the prepaid cards are not well regulated. Traub says the Consumer Financial Protection Bureau has the authority to make basic rules for the prepaid card market. She says the passage of the Credit Card Act three years ago made credit cards a fairer and better product for consumers, but it didn’t apply to prepaid cards.

The American Express Bluebird card becomes available next week. In early 2013, the companies plan to add additional features and services to the card.

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