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Suze Orman's prepaid card isn't necessarily a good deal

Don't choose a prepaid card just because it's from Suze Orman.

The personal finance guru this week introduced a prepaid card that she's touting as a "smarter way to stay debt-free." Orman says that her Approved card costs just $3 a month "if you use it how I tell you to."

But as with most prepaid cards, the amount cardholders ultimately fork over will vary significantly, depending on their spending habits. Other features of the card are worth a closer look as well.

In general, prepaid cards are used as a stand-in for debit cards by people who don't have checking accounts. The cards are advertised as a way to control spending or dodge steep bank fees. But the fees on prepaid cards can rack up quickly as well.

Here's a closer look at the terms:

>Fees

The upfront cost of the Approved card is $3, which is line with some of the cheapest prepaid cards on the market. But after the first month, the card charges a $3 monthly fee.

By contrast, the American Express prepaid card doesn't carry a monthly fee. Other prepaid cards, including the one by industry heavyweight Green Dot, give users ways to avoid the monthly fee, either by setting up direct deposit or making a certain number of transactions each month.

The ATM fees are another matter. The Approved card partners with the Allpoint ATM network, which has 35,000 machines nationwide in drugstores such as CVS, Walgreens and other retail locations. But customers using an Allpoint machine are still charged $2 per withdrawal, unless they set up direct deposit or a recurring bank transfer of $20 or more. Each transfer or deposit waives ATM fees for 30 days.

If cardholders use an out-of-network ATM, they're charged $2 per withdrawal plus the ATM operator's fee. In most cases, that would add up to $4 or $5 per withdrawal.

Then there are the more ancillary fees to consider. For example, cardholders can speak with a customer service representative once a month. But after that, each call costs $2. It's free to pay bills electronically. Those who need to pay rent or another bill by paper check have to pay $1 per payment. A full list of fees can be found at theapprovedcard.com/fees.

Keep in mind that it also costs $3.50 to load cash onto the card at a retail location. It's free to add money through direct deposit or a bank transfer.

>Free perks

Even if you incur several fees, you may feel that card's free perks make up for the costs.

For example, one of the unique features of the Approved card is that it gives users unlimited access to their TransUnion credit reports and scores for one year. But it's worth noting that the score cardholders receive is a VantageScore, not the widely used FICO scores.

Free reports and scores are also available from other sources, without having to buy a prepaid card, says John Ulzheimer, president of consumer education for SmartCredit.com.

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