From 2012, a commentary on Suze Orman, debit cards, and who you should listen to about money.
As I have said previously, I am a big fan of Suze Orman and her no-nonsense attitude about debt and such however she did something recently that puts her in a different light for me.
Last week Ms. Orman announced a Debit Card approved by her which sounds innocuous until you started to read the fine print. The fine print is what is causing me to rethink my opinion of her. While I have no problem with someone hustling to make a buck (heck, I do it myself, as you have seen with my Quicken Review and other things I have talked about). This new venture has me scratching my financial head.
For those about to hit the Comment button and want to leave some comment about The pot calling the kettle black or something like that, feel free. My opinion is someone who has thrust themselves into the Public Eye making statements about getting rid of debt and such who then endorses something that seems to fly in the face of some of their advice. I am not putting her in the same grouping as Garth Turner, but it still concerns me.
Some of the highlights being mentioned by other financial bloggers (nothing like financial bloggers to stir the pot (evidently Suze has made some very derogatory remarks about we Fin Bloggers as a species)):
- This is a DEBIT Card (not a credit card) yet you must pay a yearly fee of $32 for it? Yes, banks charge me for the same thing. Why do I pay someone other than my bank to access my money? It’s only $3 a month, but I don’t pay anything to PC Financial.
- The card will share your spending information with TransUnion and hopefully they will take this into consideration for your credit score (I am badly paraphrasing what she says, you can read the transcript of an NPR interview where she explains further)
- She has promised the fees will not go up.
The major problem seems to be that Credit Rating Clearing Houses (like TransUnion) do not now consider your bank or cash spending patterns. They look at Credit Card transactions (hence the name Credit Rating, I guess). Ms. Orman is promising that she is going to try to get the Credit Bureaus to use the information from her card to help repair your credit scores. This is where many Fin Bloggers have been piling on.
I do not doubt that Ms. Orman may think this is a noble quixotic quest. However, whether she can change how the system works remains to be seen, and my issue is with her lending herself to a product in the industry that she analyzes. Am I naive to have these doubts, maybe, but what is next? The Suze Orman set of Mutual Funds (with a 4.0% MER?) or something like that? It makes it harder to believe an analyst once they are part of the industry they are analyzing. Maybe I am not too obtuse.
Will Ms. Orman lose any prestige? I doubt it. My guess is the only folks she has irked are we Narrow-Minded Financial Blogging Bigots. She wasn’t making much money from us, anyhow. If she succeeds and helps repair some Credit Ratings, good on her too!