A debit card tied to the Kardasians has been canceled. The reality sibs – Kim, Khloe and Kourtney – launched it Nov. 10, but sales were scrapped Monday because the prepaid MasterCard-branded card carried “outrageous” fees — which is bad news for the financially irresponsible who may buy it. In a statement Monday, the Kardashians’ lawyer said: “The Kardashians have worked extremely long and hard to create a positive public persona that appeals to everyone, particularly young adults. Unfortunately, the negative spotlight turned on the Kardashians as a result of the Attorney General’s comments and actions threatens everything for which they have worked.” The 250 consumers who own the card need not worry: They may continue using it for 30 days (thereafter they would receive refunds of balances and up-front fees).
What fees you ask? Welp CnnMoney helps us understand below:
In addition to the legal allegations from Blumenthal, the card received heavy criticism from industry experts and consumer advocacy groups for its long list of fees.
While regular bank debit cards are typically free and don’t charge any fees, a 12-month Kardashian Kard cost $99.95 just to own, including a card purchase fee of $9.95 and 12 monthly fees of $7.95. After the first year, consumers would have to continue to pay the $7.95 monthly fee.
On top of these initial fees, it cost Kardashian Kard users $1 every time they added money to their card, and it cost $1.50 to speak with a live operator. If they wanted to pay their bills automatically using the card, they were charged $2 per transaction.
In exchange, consumers could make payments online, over the phone or in stores without racking up credit card debt or overspending their checking accounts.
This notion of debt-free spending is why prepaid cards have shot up in popularity, becoming increasingly attractive among consumers who don’t qualify for credit cards, are fed up with skyrocketing interest rates or are young and just entering the world of plastic.
But most prepaid cards — including the now-expired Kardashian Kard — just aren’t worth the cost, with many charging activation fees as high as $40, monthly fees of up to $10, paper statement fees of as much as $5.95, inactivity fees up to $9.95 and customer service fees as high as $3.95.
“After enduring a week of bad publicity, the Kardashians have made the right call by pulling out of the prepaid card business,” said Gail Hillebrand, a senior attorney at Consumers Union. “But other prepaid card rip-offs are rampant in the marketplace and consumers remain vulnerable to high fees and weak protections.