San Bernardino Sun (California)
CENTURY CITY – “Magic” Johnson is playing yet another game.
The basketball star turned business magnate will be the representative face of a prepaid debit card that targets the more than 70 million Americans who do not have access to mainstream credit. Due out this spring, Johnson has partnered with Visa, Celebrity Cards International Inc. and WildCard Systems Inc. to distribute MagicCash cards through a variety of retail and media outlets.
For a man who made his name as an all-star Los Angeles Laker, Johnson said he is comfortable adding a debit card to a growing portfolio of business ventures. Johnson already owns four banks, and though he wouldn’t elaborate as to whether the debit card would one day help customers access a Magic bank, “I will continue to make these moves until I feel that all communities have an equal playing field,” Johnson said during a press conference Tuesday at the St. Regis Los Angeles Hotel.
The debit card will cost $29.95, with monthly fees ranging between $3.95 and $4.95. There will also be a fee when a customer replenishes the card with more cash. Johnson and his business partners said they have also put a $2,000 limit on the card to encourage more prudent spending habits.
“For many that have abused credit cards, this will be their one last chance,” Johnson said. “This card will help them understand that ‘This is my budget and I’m going to build up my discipline.’,”
Prepaid debit cards have gained popularity in recent years, especially as retailers and even Visa invest in the concept of gift cards. Similar to Johnson’s pursuits, rap mogul Russell Simmons introduced his version of a prepaid debit card in 2003 called The Rush Visa. The card’s slogan: “Just like a credit card. Without the debt.”
With many underserved communities dependent on check-cashing stores for their banking needs, prepaid debit cards are a viable alternative, according to Harvey Rosenfield, with the Santa Monica-based Foundation For Taxpayer & Consumer Rights.
“But the fact that Magic has to sell debit cards is an utter condemnation of the banking industry. Banks do business in communities with money, but there is institutional racism in these other communities,” Rosenfield said. “And now we’re paying Visa to provide banking services.”
But the banking industry doesn’t perceive prepaid debit cards as competition. Instead, Tracey Mills, a spokeswoman for the American Bankers Association in Washington, D.C., characterized prepaid cards as “just another popular payment option. And some are more expensive than others. That means the public needs to read the fine print,” she said.
As for the dearth of banking options in underserved communities, Mills said many “banks are making inroads. But I would say there is a lot more work that needs to be done.”