As Dave Barry says, I am not making this up.
Last year when I decided to post three times a week, I was concerned that I’d struggle to find blog-worthy material. After all, there’s only so much military retirement and financial independence wisdom out there– and I can’t keep recycling it every six months. Can I?
Ah, but I neglected to consider all the behavioral issues. We appear to have an endless supply of that commodity, especially bad behavior. 2012 is shaping up to be a very good blogging year– and it’s only January!
Our latest entrant in the “seemed like a good idea at the time” contest is Suze Orman’s debit card. I’m not going to dignify her project with a link (this blog’s SEO doesn’t need it anyway), but you’ve seen this scheme before. It’s a celebrity-endorsed pre-paid card for the “unbanked” people who (for whatever reason) don’t have a checking account. It’s also considered a good tool for people who don’t have the credit rating for a credit card– or who don’t want one. Pretty straightforward, right?
At first her card seems like a noble project, even altruistic. It helps people who aren’t even trusted by banks to be able to balance a checking account. Some journalists endorsed her card because of other celebrity cards’ high expenses and low service. Suze Orman’s debit card looks pretty good compared to the Kardashian Kard. [Insert lesser-of-two-evils humor here.]
Even better, the debit card company will forward user data to a credit-reporting agency. Ms. Orman hopes that the credit agency would use a consumer’s debit-card record as justification to qualify for a credit card.
The catch with the data-reporting initiative is that a debit card doesn’t say anything about a consumer’s credit behavior. Editorials pointed out that a debit card just shows how consumers spend their money, not how responsible they can be about paying back short-term credit. Meanwhile the skeptics & cynics wonder what the credit-reporting agency is going to do with all that spending data: perhaps sell it to another company for a tailored advertising campaign encouraging the debit-card owners to spend even more of their pre-paid balance?
However the journalists began to withdraw their support when Suze Orman suggested that the Occupy and “move your money” campaigns should move their money to her card. There didn’t seem to be any benefit to moving from a bank (with fees) to a debit card (with fees) and her advice had the appearance of a personal conflict of interest. “Unbanked” didn’t seem like a good idea, either. If you’re already qualified to have a bank account, then why not move to a credit union? If you’re not qualified to have a bank account then you could try to open a secured checking account at a credit union, or find a cheaper debit card. “Unbanked” should be a problem, not a lifestyle.
Then there are the fees on the debit card. Oops: looks like a good ol’-fashioned profit motive here, and against a disadvantaged demographic to boot. If Suze Orman is so smart, then could she design a card without fees? If she’s so rich and noble, then why not support the unbanked by paying the fees out of her own pocket? Even from a business perspective, why not lose a couple million dollars the first year to build a user base? Then, like every other company’s revenue model, she could gradually start sneaking in the fees or building in advertising or selling consumer data.
This is the part that writers love to write: “But wait– the story gets even better!”
Like many other personal-finance bloggers, PT Money pointed out the card’s flaws and tweeted that it was “weak”. Suze Orman accused him of being ignorant of the big picture. That’s debate and controversy, and that generates healthy publicity. It certainly generates a lot of blog hits, so most bloggers don’t mind a little civilized name-calling. He acknowledged her assessment and went on to evaluate the card on its own merits, not its sponsor’s.
Unfortunately Ms. Orman was apparently still offended, and she resorted to a Twitter flame war: she tweeted the word “idiot” to refer to PTMoney. I’ve spent a couple of days with Philip, and he’s one of the rising stars of the personal-finance blogger community. He’s a top-50 blogger in the PF community, with a huge following and even a few television appearances of his own. He’s founded a popular conference series, and he’d be happy to include celebrities like Suze Orman at the panel discussions and networking events. He supports the military so well that he was included in USAA’s blogger conference. Oh, and did I mention that he’s a CPA? Philip’s a lot of very complimentary and impressive things… and he’s not an idiot.
In fact his response was pretty classy: he ignored the Tweet. But then, he knew that it would get plenty of attention anyway.
Many celebrities have made an off-handed remark, only to discover that their inattentive and seemingly innocuous commentary ignites a publicity backlash. Maybe they responded in anger to criticism, and had to deal with that backlash too. But very few celebrities leap into the controversy and pour more fuel on their own flames. You can read the entire sad Twitter summary at this post. Suze Orman’s tirade didn’t stop until her behavior was challenged by NYT columnist Ron Lieber. Only then did her apologies begin, and they only continued when she was prompted by the crowd.
I’m willing to give Suze Orman a break for a lapse of judgment. Many celebrities have shown that they should hire a professional to handle their social media, and she could have been just another member of that regrettable crowd. However she’s continuing her offensive, and she’s giving the PF community plenty of material to feed the debate.
I think her behavior is going to be one of the year’s top examples of celebrity self-destruction. There may be no such a thing as bad publicity, but it’s hard to market a product when everyone is laughing at you– not with you.
It’s a shame. Her books and her show have taught our daughter a lot about personal finance, and we’ve had many Suze-inspired money conversations. She’s helped millions improve their relationship with their money, and many credit her with helping them get out of debt. However Suze Orman has repeatedly given misguided advice to the military (see the links below) and now she’s destroying what remaining credibility she has. She may have achieved financial independence, but this is not the way to start a retirement. I sincerely hope this is the last time I have to post about her, but I’m pessimistic.
By the way, if you’re in the military then you don’t need her debit card either. Even most veterans can get an account with Navy Federal Credit Union or Pentagon Federal Credit Union.
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