NEW YORK (MainStreet) — Russell Simmons is considering offering alternatives to payday loans and cash-back rewards to users of his RushCards as competition in the prepaid debit card market widens.
The additional offerings would build on two services RushCard recently launched. The first is a goal program that offers cardholders the opportunity to earn $2 back for each month that they maintain a balance of $500 or more in subset savings accounts. The second allows those who have direct deposit to get paycheck funds two days early.
But Simmons said in an interview that he is “looking to see if we can provide a cheaper loan” so his cardholders don’t have to resort to payday lenders to pay monthly bills. He also hopes to raise cash-back rewards to 5% on up to $10,000 in funds users manage to save toward specified financial targets in their RushGoals accounts each month.
“When we do this, it’s going to be the best savings account out there,” Simmons says. He adds that both offerings are still in the planning stages and will require “more research and development” before any plans are finalized.
The potential additions to RushCard’s services come at a time when the prepaid debit card market is heating up. Earlier this week, Suze Orman launched a low-fee card that provides its users with credit monitoring services furnished by TransUnion and major issuers such as American Express (Stock Quote: AXP) and Capital One (Stock Quote: COF) added low-fee prepaid cards to their arsenals in 2011.
Simmons says he doesn’t plan to change the RushCard’s current fee structure, despite the fact that its $9.95 monthly fee is higher than many of its competitors. Instead, his focus is to add services and tools to give underbanked and low-income people easier access to their money while improving their financial literacy.
“I’m going to keep innovating,” he says. “My job is to provide good service and financial well-being. The education process is expensive ... If I find ways to lower the price, I’ll lower the price.”