Update, December 22, 11:26 p.m.: 38-year-old Brian Newberry has been developing debit cards for young people for the past 10 years. He actually came from a big bank (which he won't name) that he says wanted to essentially exploit the youth market with high-fee products. From that experience, Newberry says he figured out there is a better way to go to help kids and their parents spend money wisely. He left to start Plastic Cash
International that operates in offices above Jack's Surfboards in Huntington Beach and in Burbank, San Francisco and New York.
]
Newberry, who calls his company a pioneer in the teen pre-paid card market, chatted with me because he was miffed at my original blog post
below. When an item starts, “Do you suppose a special place in Hell
has been reserved for those behind Huntington Beach-based Plastic Cash
International . . .,” you can't really blame him.
Actually, he's also miffed at the
original coverage that led to my post. A financial columnist in St.
Louis called on Newberry because another company's credit card
emblazoned with a photo of the Kardashians was kaput. The fees were outrageous and, as it turns out, the company had not been authorized to use teen America's favorite sisters.
The controversy, the
columnist reasoned, had drawn attention to the youth pre-paid market. Hello,
Brian “The Pioneer” Newberry. The thing is, Newberry told me, his Myplash cards are designed to help
kids manage their money better. He does not gouge them with fees like
the banks do. Actually, like the banks used to do. Nowadays, those under
21 need a parental co-signer to open checking accounts.
“Not all pre-paid cards are bad,” Newberry said.
He gets where I was coming from: that credit cards are evil and wallet
plastic geared toward kids seems to be leading them into the mouth of that
evil. But another way of looking at it, the Newberry way of looking at
it, is kids can only spend as much as they have pre-loaded onto their
Myplash cards. Their parents can track their spending.
Besides monthly fees that are under five bucks, Myplash does charge small ATM fees. But a page on the Myplash website shows kids and their parents how to avoid them.
Newberry notes that as celebrities, rock stars and cartoon characters
have been authorized to join the Myplash roster, he has not issued press
releases. You don't see Myplash commercials on Nickelodeon. He's
kept things relatively low-key. Plastic Cash
International only has 30 employees, he said. Newberry wants to make money, sure, but not on
the backs of the young.
He swears this and, I must say, he makes a compelling case.
Original
Post, December 14, 7:38 a.m.: Do you suppose a special place in Hell
has been reserved for those behind Huntington Beach-based Plastic Cash
International, which just unveiled a new line of
prepaid debit cards for children?
You can't miss them: they are the cards that feature images of Bratz, rappers, rockers, surfers, Twilight stars–and the
ubiquitous MasterCard logo.
As columnist Matthew Hathaway writes for St. Louis Today, the cards marketed for teens as young as 13 have raised eyebrows.
He quotes Bill Hardekopf, author of The Credit
Card Guidebook, saying while there's
nothing illegal about youth-marketed debit cards, “it sure
bothers me as a parent and seems to cross over the line of what is
good taste.”
But founder and president Brian Newberry described Plastic Cash as a socially conscious company out to help young consumers and their parents. It's not, he said, about “gouging teens.”
Hathaway concedes Myplash fees are low when compared to many other
prepaid cards, and Newberry claims his 10-year-old company goes out of its way to tell cardholders how to avoid many
of those fees.
But Hardekopf says in the column young consumers would be better off steering clear of
most youth-marketed cards and getting a debit card the old-fashioned
way, by opening a traditional checking account. Besides the fees being lower, checking accounts help build and improve
credit scores.
While Newberry acknowledges teens can't build a credit history by
using his cards, he points out they can't ruin one either.
Still, why even go down the plastic road if you can avoid it?
OC Weekly Editor-in-Chief Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the alternative newsweekly’s first calendar editor.