The Kaiku Visa prepaid card is designed as a low-cost alternative to traditional credit cards and bank accounts, and it seems to serve its purpose well, with the issuer charging just two avoidable fees. Here's a quick breakdown of the benefits and costs of the Kaiku card, as well as how it stacks up to its peers.
A list of useful features
Kaiku offers cardholders a variety of features designed to provide an all-in-one way to manage personal finances. Some reasons people might sign up for the Kaiku card include:
- Direct deposit of paychecks (avoiding the monthly fee in the process)
- Mobile deposit capability from iPhone and Android phones
- Universal acceptance of Visa-branded cards
- The ability to transfer money from PayPal and Amazon.com
- Cardholders can transfer money to other Kaiku cardholders' accounts
- Online bill pay
- Access to Cardtronics' Allpoint network of 55,000 ATMs, without any charges
- Authorization to deposit cash at Visa ReadyLink and MoneyGram locations across the U.S.
Users can load up to $10,000 on their card, and can each day spend up to $3,000 ($1,500 per single transaction) or withdraw up to $500 in cash from an ATM.
Although it has many useful features, Kaiku isn't right for everyone. Prospective customers should be aware of the downsides to prepaid credit cards.
For example, a prepaid card won't help you build your credit, no matter how good your payment history. If one of your main goals is to improve your credit, but you can't obtain a traditional credit card, you might want to think about an alternative such as a secured credit card.
Additionally, while Visa cards are accepted virtually everywhere that takes plastic, prepaid or debit cards are not (note the "debit" distinction on the sample Kaiku card at the top of the article). With just a prepaid card, it can be tough to rent a car or get a hotel room, and those that do accept prepaid cards are likely to put a significant hold on your account. Plus, when paying for gas at the pump or dining at a restaurant, the cardholder's agreement clearly states that a hold will be placed on the account.
What is costs, and how it compares to peers
As mentioned earlier, Kaiku only directly charges two fees, and they are both 100% avoidable. There is a $3 monthly maintenance fee that can be avoided with direct deposits of more than $750 per month, along with a $1.45 ATM transaction fee that can be avoided by simply using one of the 55,000 in-network ATMs.
Other fees are beyond Kaiku's control, such as a cash-loading fee of $2.95-$4.95 that is charged by the merchant, and a $5 minimum fee for expedited mobile check processing (to have immediate access to a deposit).
As far as the competition goes, I believe the biggest threats to Kaiku are competing products from American Express and Green Dot.
American Express Bluebird is a similar product, but it has more features designed to replace a checking account, such as the ability to write paper checks. Furthermore, Bluebird has even fewer fees than Kaiku. In fact, the only fee listed on Bluebird's fee schedule is a $2.50 foreign ATM charge; however, bear in mind that this is 72% more than Kaiku charges for the same service. American Express cards also don't have nearly the same universal acceptance as Visa's, and Bluebird's free ATM network is less than half the size of Kaiku's.
The Green Dot account is a Visa or MasterCard product, but has significantly higher fees. The monthly maintenance fee is $5.95, and the direct deposit waiver threshold is a higher $1,000. There are other fees, such as a $4.95 card replacement charge and a 3% foreign transaction fee, that both Kaiku and American Express' customers don't have to worry about.
As far as prepaid cards go, Kaiku is a solid product with low fees, nearly universal acceptance, and excellent features. As long as building your credit and potential holds on your account for certain purchases aren't big concerns for you, the Kaiku Visa prepaid card is definitely worthy of consideration.