While I still think that a good credit union is a better choice for most folks, this looks to be a great alternative for banking services for those who can't get or afford a bank account. The Clark Howard article touches on some of the things that this new service does, but doesn't get into some of the details. This is essentially a pre-paid credit card account but on steroids. It will allow you to:
-cash checks via your smartphone (bye-bye check cashing services)
-transfer funds for free to other card holders. As setting up an account is free, this will take a real bite out of western union.
-Free web bill pay. Can't see the details as I don't have an account, but looks to be a de facto online checking account.
-Allowance for subaccounts....you can give to other family members and control their use.
-Allows you to deposit cash to your card/account at any wal-mart.
-ATM access. Free if you direct deposit to the account, small fee if you don't.
This is not an endorsement as I don't use this yet, but looks to be a very cool idea and a game changer for retail banking.
FDIC is a disgusting scam. It forces small banks to cut rates from 1/2 percent to 1/4 or zero while larger banks make their profits on absurdly low Fed rates. The FDIC is backed up by the full failure and bankruptcy of the Federal government. Kudos to Walmart to thumb their nose at the FDIC, but mark my words, the PTB are not going to be happy and will try to penalize them.
The main problem I see is that, unlike a credit card, if somebody makes unauthorized charges against your account, you have no recourse.
Not that I don't think it's a great idea, you just have to be aware of the differences.
An great way to move cash into and out of the country.
What could go wrong here ?