I want to add one more decent option for consumers looking to find a better prepaid debit card. Advent Financial, through a relatiosnhip with Bancorp Bank, is offering the Advent Financial Card. This card is a low-fee, highly flexible product.
First off, I like that there is no monthly fee just to have a card. I have seen this for between $4.95 and $9.95 at competitors. The card's fees seem to be driven by use - it does cost money to make an ATM withdrawal or to get a balance inquiry.
There are "ideal" products in many different financial services categories. In tax prep, where national chains charge as much as $305 for a basic return, VITA provides free tax work. There are other instances, but hey, this is a blog, so I'll move quickly. It would be great if everyone flocked to this card, and left the higher cost cards. Will they? I am not so sure. People tend to stick with what they know. There are already billions of dollars of deposits on other cards. Will those consumers drop their cards with high monthly fees and move over to Advent? It will be interesting to come back to Advent in 12 months.
Advent might change, too. Advent was developed by former H&R Block CEO Mark Ernst. He subsequently sold his 70 percent stake in the company to NovaStar Financial. If you remember sub-prime lending or Herb Greenberg, then you might remember Novastar. In a former life, NovaStar was one of the nation's most aggressive Alt-A lenders. NovaStar's shares sold for $105.80 in the first quarter of 2007. They were regularly paying dividends of more than 11 percent. By the end of 2008, their shares were selling for 22 cents and they reported a book value of negative $787 million.
Now they are reconstituted as a company with two subsidiaries - an appraisal service and a prepaid card provider. I'm not ready to say that Advent is perfect. I'm more than ready to believe that NovaStar's management could take this company in a new and less promising direction. I still like the Direct product from Treasury.