The TV airwaves have been flooded by a new advertising campaign from Green Dot. Mostly known for their prepaid cards, Green Dot is branching out into bank accounts with an almost too-good-to-be-true offer.
They are offering a 3-percent interest rate on your savings account, and 3-percent cash back when you make purchases with the debit card that comes with that account. Unheard of benefits on both scores.
Don’t get too excited however. Their fine print is sure to put a damper on your enthusiasm.
The deposit agreement for the Unlimited Cash Back account is full of goodies.
*MOUSE PRINT:
The offer promises 3-percent interest on your savings up to $10,000. Well, how much is the interest rate on amounts over $10,000?
Answer:
So, you get no interest on larger deposits, and it is possible that the 3-percent interest rate could change.
That possible change in interest rate is an important disclosure because of the following additional disclosure:
*MOUSE PRINT:
Interest is only credited once a year, and at the rate in effect at that time!
And the bank has fees for this account. If you make a deposit in cash at a retailer, you can be charged up $5.95. Here are two more fees.
*MOUSE PRINT:
You have to pay $7.95 a month unless you spend $1,000 using their debit card. That seems pretty steep on both scores.
If you do spend any money with the card, you do get 3-percent cash back, but even that has some key restrictions.
*MOUSE PRINT:
Only purchases made via an app or online qualify for the 3-percent back. And even certain of those purchases don’t count either, like airline tickets, person-to-person payments, bill payments, gift card purchases, etc. And to add insult to injury, the cash back you are entitled to is only credited to your account once a year.
With all these restrictions, you may not become green with envy of anyone using this card.
Follow the pretty green dot through their mental maze. Yup, again “too good to be true” should be a consumer’s guiding light.
If you need to use Greendot you probably do not even have a regular bank account to begin with.
Then you throw in the fine print with this account and you have one very crappy product.
1,000 a month sure is steep before a penalty.
This doesn’t surprise me honestly. Green Dot is a company I’ve always seen as preying on people who aren’t able to or don’t want to get a regular bank account. If you’re looking for a 2-3% savings account T-Mobile has one, and plenty of credit unions and online banks have accounts with 2-3% credits.