You may remember a few weeks ago I wrote about the new Kardashian Kard. This pre-paid debit card, which was initially targeted to teens, is full of ridiculous fees and should be avoided at all costs!
Well, now the Kardashian sisters no longer want to be affiliated with the card. Immediately there was a lot of negative press calling the Kardashian Kard a ripoff! Now Yahoo Finance is reporting the following:
An attorney for the sisters sent a letter Monday to parties affiliated with the card asking them to immediately stop using the names and images of the three sisters.
The notice came after Connecticut Attorney General Richard Blumenthal warned on Friday that he would investigate the program to see if it violated state laws to protect consumers. He called the card’s fees “predatory.”
It’s not just the fact that the card includes these awful fees, but that the card is being marketed toward young adults who have little to no experience with debit cards or even bank accounts.
The fact that the Kardashian’s are so popular with teens and young adults could have made this a great opportunity to teach them about personal financial management. Instead, they used this as a way to rip them off!
If you don’t remember how terrible the fees actually are, I’ll repost them here:
The Kardashian Kard’s Pricing and Fees
Initial Purchase Options:
- 6 Month Payment Option (save $2.70) – $59.95
- 12 Month Payment Option (save $10.40) – $99.95
These options include the following charges:
- One-Time Card Purchase – $9.95
- Card Arrives Loaded with $5 – $5.00
- Monthly Fee – $7.95/month
So, when you first purchase this card, you can either buy a 6-month package or a 12-month package. Then after that initial period, you must pay $7.95 each month! This means that in the first two years of owning the card, you will have to pay at least $195.35. Keep it for 3 years and you’ll be out almost $300 in fees!!!
There are fees for the following:
- ATM withdrawals
- ATM Inquiries
- ATM Declines
- Point of Sale Declines
- Transfers to or from an external bank account
- Transfers to another Kardashian Kard
- Adding Money to Your Account
- Canceling Your Account (when requesting a refund by check)
- Calling Customer Service
- Paying a Bill
- Replacing Your Kardashian Kard ($25!!!)
It is because of this list of fees why the Attorney General threatened to investigate the card! These fees put the card in the same category as payday loans in my eyes!
Don’t expect to see a long drawn-out battle over the Kardashian sisters’ contractual obligation to promote and be associated with the card:
In a statement late Monday, card-issuer University National Bank confirmed that it had ended the sale of the Kardashian cards. Consumers who bought the card will get their money back, including fees that they might have incurred, it said.
MasterCard, which was a partner in the card, said in a statement that “the decision to end the program affirms that consumers did not find value in this particular prepaid offering.”
“Did not find value in this particular prepaid offering”?!?!?!?!? They wanted you to pay $100/year for this card and expected you to find value in it? At least the misguided (I’m being extremely kind here) people who purchased this card will get their money back.
The website has already been shut down, so I guess it’s really official. Of course, my wife just asked me, “why didn’t they just improve the deal?”. All I can do is laugh, because that would have been the sensible thing to do. They could still have the Kardashian name to back them, but just not gouge kids as much as before!
Reader Questions:
What are some ways that you are working to teach your kids about personal finance?
Did you buy this card for yourself or your kid?
What do you think about all of these fees?
Why do you think they decided to shut the card down rather than rework the fee structure?
Who would use a card with fees unless you’re getting ALOT for it? As a matter of fact, I think I just wrote off my Discover card. They give you 5% cash back on certain categories.. I thought up to $300 back.. But its only up to $300 in purchases, then reverts back to their small cash back. Who hu. The fine print. Back to my normal cash back Citi Card.
Yeah, I’m with you! I can’t see paying a fee to use a card unless it had a tremendous benefit.
I’m glad you had another cash back card to go to. $300 in purchases is pretty much nothing!
I like to think it was the pressure of articles from bloggers like you that made them re-evaluate the Kard.
I don’t think the Kardashians did their homework in going along with this deal.
Hahaha – I would like to think that as well.
They couldn’t have read the terms before signing on! Maybe this will cause “stars” to do their homework before endorsing products in the future!
Woah those fees are outrageous! The fine print wasn’t so fine on that one. I don’t have kids but I think a secured card is a decent way to teach them about money. How was I taught? With real money. Getting a job, getting a bank account, and just being scared to hit 0 or negative, knowing my parents would only help me in extreme circumstances. I didn’t get the card, and wouldn’t have because I know there’s always a motive and knew about some of the fees associated with them, but not THAT many, good grief! They probably shut it down because they couldn’t take the heat and didn’t know what they were doing in the first place.
Yeah, those fees were outrageous! I’m sure they just couldn’t deal with all the negative press. It’s not like the fees were a secret, I guess they thought people would just ignore them.
At the gift card displays (in drugstores or supermarkets) I see a cash value Credit Card for $25 or $50 which has a $4.95 purchase fee. Just as bad. Those should be ended as well.
Very true! I received a gift card recently that had a $5.95 purchase fee! There are many things for which we pay outrageous fees if we view it as a percentage of the value of the product (ATM Withdrawals for instance).
Hopefully, Khaleef, none of your readers has bought this card. If so, you should probably restructure your content 🙂
Like you have summarized, the card was absolutely horrible. But in the end, it’s not too different than the Rush Card by Russel Simmons. I think that this card got a lot of attention because of so many haters of the Khardashians “claim to fame.” Yes, it was a horrible piece of crap, but there are plenty of products that are this bad, if not worse, (i.e. payday loans) and they are still prominent.
I hope no one bought it! Someone mentioned the Rush card when I wrote the first article. Up until that point I had not heard of it. I do think that certain products make themselves to be easy targets, even if they are no worse than others.
Well I guess there intention was to make money instead of “helping teens and young adults use money wisely”. To change the fees would mean not making as much money and I probably wouldnt be worth the business venture at all. The sad thing is that they could be a positive influence because of their popularity.
I think they should have tried to fall in line with what other cards charge. Then they could have still made something. But you’re right, they probably just wanted to rip people off and now that they can’t, they’ll just shut everything down.