If You Don’t Like The Kardashian Kard, Find A Kave

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I don’t have any data to back up this assertion, but I’m also betting that I’m not going to get a lot of disagreement with this statement: People in the blogo-/Twitter- sphere are not big fans of the Kardashian prepaid card.

Anecdotally, I’ve seen the following tweets:

@cardanalysis I myself am speechless- yet another example of how GREED is taking precedence over common sense and protection of youth

@jimmymarks I don’t know what makes me wanna puke more – the website for the Kardashian Kard or the reason it exists.

@suzeormanshow So I have heard of many ridiculous things but this takes the cake http://bit.ly/cuM6Fz

And then there’s an article from ConsumerismCommentary, which accuses the Kardashian Kard, with its $7.95 monthly fee,  of possibly being the worst product of the year. (What was particularly interesting to me, was that, right next to the article on ConsumerismCommentary was an ad from another prepaid card, the Rush Card, which has an activation fee of $3 and a monthly fee of $9.95.)

Personally, I’m not sure I share the horror and disgust as others seem to do.

And furthermore, to those who do seem to abhor this announcement, I have some bad news: I think this is the tip of the iceberg, and just the beginning of a whole slew of celebrity-endorsed prepaid cards.

I can’t help but wonder: If it had been Oprah who announced a prepaid card, or some other well-respected celebrity, would the Twittersphere be so up in arms?

The reality here is multi-faceted:

First of all, consumers are increasingly finding prepaid cards to be effective tools at helping them manage their financial lives — despite the monthly fees. Sure, for those of us fortunate enough to have enough money in our accounts to avoid paying monthly fees, $8 or $10 per month sounds like an onerous fee. But according to the ABA, 14% of checking account holders pay more than $10 per month in fees (they’re what I call the Overbanked).

Second, consumers love affiniation. That’s a word I made up that combines “affiliation” and “affinity.” Affinity cards are nothing new. In the credit card space, at least. No reason why they wouldn’t be popular for prepaid cards. And consumers — well, certain types of consumers, at least — like to affiliate with their favorite celebrities, athletes, etc.

Third,  the economics are compelling. This isn’t like managing a credit portfolio with its inherent risks. The economics for the celebrity and the card issuer are very attractive. There’s little risk, and the costs of issuing and administering the card are highly variable (versus high fixed cost) — which is a good thing (didn’t want this to sound like a negative connotation.

Fourth, this is a marketer’s dream. How many marketers employ celebrities to hawk their wares today? Plenty. How many of them can quantify the impact of the celebrity endorsement? Lot less than plenty. A celebrity prepaid card enables marketers to offers deals (discounts, etc.) to cardholders. It’s a way to (more) precisely target offers and (more) accurately determine the impact and return of those offers.

I can understand it if you don’t like the Kardashian Kard. But we’re going to see a lot more of these, and they’re not always going to be from the celebrities, athletes, and whatnots that you think are the most upstanding citizens and best influences on society.

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