This Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled up this week. If something's bugging you, too -- and we suspect it is -- go ahead and unload in the comments section below.
Today's subject: Kardashian sisters Kim, Kourtney, and Khloe -- already flush from a retail empire that includes clothes, fragrances, shoes, and fitness products -- now want a cut of the money teen girls are spending on their gear.
On Nov. 9, the sisters introduced a new prepaid debit card offered through Mobile Resource Card and MasterCard
Here's hoping young girls ignore their plea. Austerity isn't exactly what we're known for here in the U.S., and American teens reflect our spendthrift ways. A 2004 study by Nellie Mae found that the average college freshman carries a balance of $1,585 on credit cards.
If that number has gone down at all, it's probably not by much. Federal Reserve statistics show that Americans kept $826.9 billion on credit cards in 2005, versus $813.9 billion in September. Five years of belt-tightening has cut our national tab by a measly 1.6%.
Why you should be indignant: Prepaid debit cards are supposed to help control spending, not promote it. But don't tell the Kardashians that. The press release announcing their "Kard" is just another attempt at tapping into the consumerism zeitgeist. "Shopping just got a lot more fun!" reads the excited pitch in the press release.
Yeah, and a lot more expensive. The Kardashian Kard comes with an initial membership fee of $99.95 for one year, or $59.95 for six months. A $7.95-per-month fee applies after the purchase period.
And there are other fees. Want to withdraw money from an ATM? That'll be $1.50, plus the bank's ATM fee. Want to use the card's billpay service? That'll be $2. Want to transfer money from another debit card? That'll be 2.5% of the transfer amount, please.
Surprised? Don't be. The Kardashians need money to keep up their lifestyle, and they wouldn't put their image on anything that didn't help pay their exorbitant bills.
Remember, too, that prepaid debit cards resemble credit cards in another important way: Both make money for banks. That's why JPMorgan Chase
What now? Mobile Resources Card says applicants have to be 18 to qualify for the Kardashian Kard. If only that meant something. After all, this same company actively touts prepaid cards for teens at its corporate website, claiming they help teach money management skills.
Really? Raise your hand if you think getting your kid a Kardashian Kard says anything other than: "Here, go blow some cash on something you can't really afford."
The only lesson being taught here is how to overpay for nothing. So let's just call this scheme what it is: profiteering. There's nothing redeeming about the Kardashian Kard. Teen girls aren't being empowered. They aren't getting deals. Every signup is more money for Kim, Kourtney, and Khloe, and less for their fans.
At one time, I ranked a wallet-sucker called the Aspire Visa as "The Worst Credit Card Ever." Thankfully, that card is now defunct. I can only hope the Kardashian Kard suffers the same fate. Until it does, this fee-laden farce gets my vote as most worthy of taking Aspire's place atop this most putrid plastic mountain.
Now it's your turn to sound off. What do you think of the Kardashian Kard? Would you get one? Would you let your kids get one? Let your voice be heard in the comments box below.
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