‘Tis the Season? The Walmart MoneyCard

Some of you have asked me about the new WalMart MoneyCard. Yawn.

The Walmart MoneyCard is basically a prepaid Visa debit card. What does that mean? It is NOT a credit card, and you cannot charge and pay for items over time. How does it work? Simply stated, you take your money, give it to Walmart, and for a $3.00 fee you get to use your own money. But of course that’s not the entire story. You can reload the card anytime you like, for a $3.00 fee. Or you can hold onto it for use each month, for a $3.00 monthly maintenance fee. Of course, you have the convenience of being able to access your cash via an ATM, for a $2.00 fee.

Hmmm… do you see a pattern here?

In a previous post, I encouraged you to “think in percentages”, so let’s try that here. If you get your Walmart MoneyCard the first of November, load it with $100, replenish it a month later, access an ATM once each month, and spend the $200 on Christmas presents for your family, what did it really cost you?

We start with the $3 activation fee (it’s $6 for students, by the way), add the $3 fee to reload it, $4 in ATM fees, and then add 2 months of the $3 monthly maintenance fee – that’s a total of $16 in fees for $200 in purchases. So 16/200=8%. Of course, that’s not 8% A YEAR. That is 8% over just 2 months. Ouch!

So why in the world would anyone in their right mind ever do that? Walmart says that a good reason is that “It’s safer than cash.” Really? Unless you think your cash will be lost or stolen, one thing is for sure. In the scenario above, you will absolutely, positively have 8% less in purchasing power than you would if you just paid cash. Period. End of story.

During the holidays, do yourself a favor. Budget your holiday purchases, shop around for the best deals, use coupons whenever possible to stretch your buying power, AND PAY CASH WHENEVER YOU CAN!

Following these simple, common sense suggestions will ensure that you have exactly what you deserve the most – a Happy Holiday!

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22 Responses to ‘Tis the Season? The Walmart MoneyCard

  1. Clarence Young says:

    Thank you for the helpful information, but i do have one question when it comes to smart shopping.
    Which would you prefer shopping online or the regular shopping in person? It is said that shopping online is less expensive but is the quality better is the real question?

    • Ron says:

      It’s a tricky question, but there is no question you’re better off buying online, provided: A) you have shopped around and know exactly the model, size, color, etc. of the product you want, B) you have reviewed the merchant’s return policy and can live with it, and C) be sure to watch out for the shipping charges.

      Online comparison shopping sites (nextag, pricegrabber, bizrate, shopzilla) make it easy to quickly find the best price for virtually any item.

      Watch for coupons and special offers, but don’t fall victim to the “save 10% by opening a charge account today” pitch. You just saved yourself 10% and also likely lowered your credit score by taking on an additional credit card you may never use again.

      Of course, one advantage to shopping online is that you are not charged sales tax, and even though you are supposed to send in the tax on your own, few people ever do. On a big ticket item, 6-7% saved can be a LOT of money.

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