Suze Orman's debit card: Is it a good thing?

Suze Orman came out with her own debit card this week, called the Approved Card. It's received a lot of attention -- not all of it positive. Some people are aghast that a personal finance expert would push her own product to her loyal following. I have no problem with that. I don't even mind her making lots of money on it. But it had better be a good deal at the same time.

The Approved Card is a prepaid debit card, which works like a cross between a gift card and a credit card. You preload it with money and then use it online, by phone or at the store just as you would a Visa or MasterCard debit card. You must give your real name, address and Social Security number to apply, but you cannot be turned down because you're not borrowing any money.

Suze has always encouraged people to join the ranks of the banked, as opposed to staying unbanked and being at the mercy of check-cashing stores and other high-priced alternatives. She's also preached watching out for fees that add up over time.

So we would expect Suze's Approved Card to provide basic services needed by the people currently outside the normal banking system. It should be simple; it is being marketed to people who have shied away from traditional checking accounts, after all. And it should have very, very low fees.

I'm fine with reasonable fees. I even think ATM fees can be a bargain when you consider the costs of maintaining machines chock full of money all over town. Suze's card has a basic fee of only $3 per month, which isn't bad. The problem is that there are so many other fees, from fees for calling customer service more than once a month to fees if you don't make a direct deposit during the month.

My guess is that the targeted customer for this card will end up spending far more than $3. There's a bill payment fee for payees who take paper checks: $1. That second call to customer service in one month: $2. In a hurry? Same-day payments are $9.95. A copy of a check is $20. Payment inquiry: $30. Check out the list of fees if you still think you'll only pay $3 a month.

Plus, an Approved Card will get plastic in your hand, but it won't do everything a checking account does:

• You can't write a paper check. You may only write one check a month, but if that means driving to town for a money order (figure 50 cents per mile plus the cost of the money order), it adds up. If you plan ahead and use the Bill Pay feature online, you can avoid this.
• Debit cards are not accepted everywhere you can use a credit card. You may not be able to book a hotel or rent a car, according to the Approved Card website.
• You can't "pay at the pump" when you buy gas. You can, however, go inside and pay for your gas.
• You won't get a monthly statement. You can check your card activity online or request a paper statement for $2. This could be an issue if you ever need to prove you paid a bill.

I can see the value of the Approved Card as a transitional card for people who can't get a checking account or aren't ready for one yet. If I had a teenager, I might give him one for his spending money. But I couldn't give up my checking account for the Approved Card. My bank account lets me do everything I could do with the Approved Card and more -- for free.