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Magic's Prepaid Card: No Harm, No Foul

Adam Rust's picture

Posted February 25, 2013

If you were to come across a Venn diagram made up of two kinds of financial products - one with sound financial products endorsed by

celebrities and the other with Magic Johnson-endorsed products, you would probably come to a simple conclusion.

The overlapping intersection was empty.

In the past, Magic has been willing to lend his name to some less-than-ideal consumer financial products.

In a 2009 story entitled "Magic Johnson Shills for Predatory Loans," Kai Wright of the Root wrote:

You'd think by now that anybody with sense would feel ridiculous promising fast cash through easy loans. Alas, not Magic Johnson. It's tax season, and he's shaking his enchanted moneymaker for one of the oldest, most predatory lending scams in the business: high-priced payday loans.

The Root was describing the "Money Like Magic" campaign with Jackson Hewitt. However, Johnson has spent time carrying water for rent-to-own as well. Here is a link to one comment about that involvement. Never mind that behind the scenes, Johnson is heavily involved in efforts to protect low tax rates for carried interest.

But Magic's promotions are only slightly below the history of celebrity-endorsed goods. Some celebrity cards have been famously poor. Most infamous was the Kardashian Kard, but there have been others which capitalized on the power of affinity marketing to promote costly prepaid cards. Beyond prepaid but in the financial sphere, no shill can outmatch that of Montel Williams' role in MoneyMutual.

But that might change. Magic has recently put his name on a new card issued by One West Bank. While The Magic Card should not be anyone's first choice, it is slam-dunk problem maker,either. That said, it is the best Magic-endorsed financial product yet.

Perhaps the best thing about the card is Magic Mojo. Magic Mojo is really a savings account built on two ideas: text-praise and automatic savings. Text praise is part of the logic behind Ben Kelman's Juntos Finanzas, in which a company gives a saver constant updates about his or her progress. In Magic Mojo, when an account holder reports some kind of good behavior (avoided a $3.95 latte at Starbuck's), that sum is transferred from the "spend" to the savings.

Mainly, though, it is a medium-cost card. This card has a monthly fee of $4.95, but otherwise its generally free to do most things. Customer service is free, PIN and signature transactions are free, and in-network ATM withdrawals are free. The card comes with two free out-of-network ATM transactions per month.

This card would be particularly ideal for anyone living near Pasadena, California. OneWest Bank is going to let cardholders access their network of 74 branches in Southern California. That portends the possibility that those card holders will be able to qualify for more services with OneWest.

Now, this is not a perfect card and it certainly can't match up to some of the best in class prepaid cards. It costs fifty cents to get your balance at an ATM. But there is nothing egregious except for the paper statement fee. One West is going to extract $5.95 to anyone that wants a paper statement. There is still room to improve. For Magic, nonetheless, this is a great leap forward.