George Lopez’s prepaid card: Useful or useless?

George Lopez’s Prepaid Card: Useful or Useless? This week comedian George Lopez got a taste of what it’s like to be the Kardashian sisters, Lil Wayne or Suze Orman. Following Wednesday’s announcement of a multi-year marketing deal with Texas-based Mango Financial, Lopez became the target of criticism for lending his name to a company whose flagship product, the Mango Prepaid Card, places a relatively high financial burden on consumers. While cynics might characterize the move as a profit-driven leveraging of celebrity status – as many have argued was the case with the aforementioned public figures – others might say that the Mango Card isn’t all that bad and that Lopez’s foray into personal finance is more about promoting financial literacy than anything else. The truth is, the way in which the Lopez-Mango partnership will ultimately be viewed depends on just how expensive the Mango Prepaid Card is to use and whether or not it could excel with the right application.

It’s clear that for most consumers, the Mango MasterCard would be prohibitively expensive. This is due in large part to the fact that Mango doesn’t offer any in-network ATMs and charges a $2-per-withdrawal fee, which – with the average ATM owner surcharge in mind – means that cardholders will have to shell out roughly $4.33 each time they want to get their hands on their own cash. Add to that the fact that the Mango Card doesn’t have an online bill pay feature, and there’s really no way it’s suitable as a replacement checking account, which is one of a prepaid card’s two primary roles.

The other main use for a prepaid card is as a financial literacy teaching tool for young people. The Mango Card is not especially attractive in this respect either, but for a different reason. Most parents aren’t going to load a $500 allowance on their child’s prepaid card each month, which means that Mango will not waive its $5 monthly fee, and the high costs borne from ATM withdrawals will get even higher.

Given that the Green Dot Prepaid Card can be a free alternative checking account and the American Express Prepaid Card can be a much less expensive teaching tool, the Mango Card is not in a position to become a force in the mainstream prepaid card market. But could it be the best option for certain types of people?

Yes, under the right circumstances. First of all, in order to escape the high ATM fees, you’d have to be willing to only take out cash after making a PIN transaction at a supermarket or similar type of store. The maximum you can get from this type of transaction is usually around $50, though it varies by store.

You’d also have to sign up for direct deposit within 90 days and make sure to deposit at least $500 each month. The reason for this is threefold: 1) Mango currently offers a 6% APY to cardholders enrolled in direct deposit; 2) they give you $20 for signing up within 90 days of opening your account; and 3) the $5 monthly fee is waived for months you deposit at least $500. Finally, you’d have to maintain a fairly high balance. Keeping a balance that’s as close to the Mango Card’s $5,000 limit as possible would allow you to maximize the interest you earn and offset any fees that you do incur.

If you could somehow manage to meet these requirements and maintain an average account balance of $3,000, for example, the Mango Card would yield a whopping $15-per-month profit.

In a perfect world, this might not be that tough. But when things start getting hectic and you are in a rush, you might not feel like finding a store and buying something just to get some cash. What’s more, in these tough times, always having $3,000 in a savings account is a luxury that not everyone has, not to mention the fact that Mango’s 6% APY is a promotional offer and might not be around for that long. That’s why, despite the fact that the Mango Card has the potential to be a great option, it’s not the best choice for most consumers.

This article comes from our friends at Card Hub, an online marketplace for secured and unsecured credit card offers, prepaid debit cards, and discounted gift cards.