Banking with Walmart?

10:17 AM, Oct 9, 2012   |    comments
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(USA Today) -- For customers fed up with fees, Walmart wants to become your new bank.

A new prepaid-type card the retailer will start issuing next week allows customers to complete many of the same transactions associated with typical bank accounts, such as bill pay and mobile access, but without many of the fees that prepaid and, more recently, checking-account customers are saddled with.

Walmart's new Bluebird card has no activation fee, no monthly or annual fee, no minimum balance requirement and will be replaced for free if you lose it, says Daniel Eckert, vice president of financial services for Walmart U.S.

"It's a checking and debit alternative to appeal to tens of millions of customers that just aren't getting the value they're expecting (from other banking methods)," he says.

Other popular prepaid cards, such as Chase Liquid, charge a monthly fee of almost $5. Many also charge to load cash onto cards, to contact customer service or withdraw money from an ATM.

Bluebird members can sign up for an account online or buy a set-up kit at a Walmart for $5. The kit allows customers to register in a store and immediately add and use funds. The card can be used anywhere that accepts American Express, and money can be added to the account using cash at a Walmart register, by signing up for direct deposit, using the app to take a picture of a check, or by linking to a checking or savings account or debit card. Almost all methods are free.

Bluebird cardholders won't avoid all fees -- customers who don't do direct deposit are charged $2 to withdraw money from an in-network ATM. Out-of-network ATM withdrawal also costs $2, in addition to whatever the ATM provider may charge. And customers who choose to load funds into their Bluebird accounts from debit cards, either online or through the mobile app, are charged $2 per transfer because of the cost associated with making the money immediately available, Eckert says. Transfers from a savings or checking account are free but take three to five days to go through.

While it's not the first prepaid card to tout low fees -- American Express' own prepaid card has no overdraft, monthly, annual or customer service fees -- it's "certainly one of the lowest and one of the most attractive," when it comes to fees and capabilities, says Bill Hardekopf, CEO of LowCards.com, a website that rates and compares credit cards.

Given Walmart's high customer reach, and the fact it serves many low-income people, the Bluebird card will likely be received well, Hardekopf says.

"Anything they put their name to I think has a very good possibility of succeeding," he says of Walmart. "They have the ability to market this card to an audience that might be primed for it."

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