Occupy Wall Street's Debit Card: Selling Out or a Smart Move?

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Occupy Money Cooperative
In 2011, the Occupy Wall Street movement took the financial industry to task for greed and corruption. Yet two years later, an offshoot from the movement is now looking to use one of the financial industry's favorite tools as a way of keeping up its fight.

The Occupy Money Cooperative recently started raising money with the goal of releasing an Occupy-branded debit card. As you'd expect, the move has stirred some controversy. Proponents argue that the Occupy Card will give millions of Americans without banking relationships access to useful financial services, eliminating inequities that favor the wealthy. Critics point to the fact that Visa (V) will profit from the Occupy Card, too.

The bigger question, though, is whether the Occupy Card really breaks ground in the debit-card arena. A look at the Occupy Card's fees and features reveal it has its good and bad points.

What the Occupy Card Costs

In an industry in which prepaid debit cards often come with excessive fees built in, the Occupy Card does have several features that make it look more attractive than the usual fare. The Cooperative plans to offer the cards to users free of charge, with only a nominal fee for those who want additional cards.

%VIRTUAL-article-sponsoredlinks%There will also be low-cost options for accessing money. Users will be able to add funds to their cards through direct deposit of paychecks or other payments with no fees. To get access to cash, the Occupy Card will allow users to get cash back on store purchases of up to $60 each day, with as many as 15 withdrawals allowed per month. And of course, the card will function as a regular debit card, usable for purchases at any stores that accept Visa debit cards.

The card also has features to prevent some of the more annoying fees that helped inspire the Occupy Wall Street movement in the first place. The card won't charge fees if a merchant declines the card for having a lack of funds, and there's also no negative-balance fee or inactivity fee imposed.
Still, the Occupy Card isn't entirely fee-free.

Users will pay a monthly charge of 99 cents unless they qualify as a no-monthly charge member, which requires a minimum of five direct deposit transactions or various combinations of direct deposits and other deposits from funding sources.

In addition, some of the funding methods the Occupy Card accepts have their own fees, such as MoneyPaks and Swipe Reload options at stores like Walmart (WMT), CVS (CVS), and 7-Eleven. Getting cash from an ATM costs $1.95, which goes to network and third-party fees, and the card imposes a $2 fee if an ATM declines a withdrawal request.

Other features, such as online check service and live customer service assistance, also involve modest fees.

How Does the Occupy Card Measure Up to the Big Banks' Plastic?

Overall, the Occupy Card's fees are relatively low and attractive to prepaid debit-card users, especially in comparison to some of the higher-fee alternatives available.

The infamous Kardashian Kard from 2010 charged $100 annually just to obtain the card, as well as additional fees for many of the everyday features that customers used. That card's fees were so egregious that Connecticut Attorney General Richard Blumenthal referred to the Kardashian Kard as "predatory."

By contrast, the Occupy Card's minimal fees are reasonable, and the card is designed to help customers find fee-free alternatives to many of the actions that incur charges.

Still, some other prepaid cards charge even less.

Bluebird, for instance, is a card offered jointly by Walmart and American Express (AXP). The card has no monthly or annual fee and also doesn't charge for initial activation. It offers a variety of different no-cost funding methods, including direct deposit, transfers from a bank account, or checks deposited by mail or through a mobile app. For those who use direct deposit, ATM transactions at in-network MoneyPass locations are free, and the card doesn't impose any fees for bill payment and purchase transactions. Bluebird even offers paper checks, with the costs waived throughout the rest of 2013.

With a goal of $900,000 for its fundraising drive, the Occupy Money Cooperative hopes to change the way people manage their money. Whether it succeeds will depend on whether enough people are willing to bear its minimal costs rather than turning to even cheaper alternatives to get many of the same services.

You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+. He doesn't own shares of the companies mentioned in this article. The Motley Fool recommends American Express and Visa. The Motley Fool owns shares of Visa. The Motley Fool has a disclosure policy.
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