By Mark Hall, Freelance Journalist
New York, NY–(HISPANIC PR WIRE)–November 7, 2006–According to a recent Survey of Consumer Finances, 34% of Hispanic households in America are unbanked. 30% of African American households are unbanked. Unbanked households do not have access to a traditional banking relationship. Many are forced to cash their paychecks at check cashing establishments, and pay bills using cash and money orders. The cost of these services can be exorbitant.
That only 7% of Caucasian households are unbanked, has led many to point to a disconcerting disparity in America today. Hip-Hop entrepreneur Russell Simmons, Chairman of Rush Communications, believes education and access to services play a key role.
“Financial Empowerment is the final leg of the Civil Rights movement,” said Simmons. “Many young people haven’t been taught to manage their finances. They don’t know that if you don’t pay your phone bill or credit card bill that it can affect your credit, and even hurt you when you go to get a loan, or open a bank account as you get older.”
To address the lack of education and resources in urban communities, Simmons hosts Hip-Hop Summits on Financial Empowerment in major cities in America, bringing together Hip-Hop stars to provide information and awareness on managing your finances, budgeting, and understanding your credit. He also introduced the Prepaid Visa RushCard, the first general purpose reloadable prepaid card developed specifically for unbanked and underbanked consumers, and offered as a low-cost alternative to check cashers.
Unlike a credit card, prepaid cards allow access to funds loaded in advance. Reloadable card programs allow money to be added to the card balance by the consumer or through direct deposit, depending upon the program.
Today there are a number of general purpose prepaid card products on the market that require no credit check, or bank account. Along with Russell Simmons’ Prepaid Visa RushCard, and BabyPhat Prepaid Visa RushCard (see http://www.RushCard.com), products like the Wired Plastic Prepaid Visa Card (see http://www.WiredPlastic.com), and the Vaya Prepaid MasterCard Card (see http://www.VayaCard.com) enable individuals to get back on track financially, and ideally transition to a more traditional banking relationship.
Features and services of reloadable prepaid cards differ from provider to provider, but core functionality is similar, including the ability to: direct deposit your paycheck; pay bills online and via the Visa or MasterCard payments network; load cash directly to the card in retail locations nationally; withdraw funds at ATMs; and check your balance and payment history online.
Lisa Snell-Smith has used the BabyPhat Prepaid Visa RushCard since it was first introduced. She admits, “I don’t think I ever learned to manage money correctly. I wrote checks to people, which would bounce.” Since using the BabyPhat Rushcard, Snell-Smith deposits her paychecks directly to the card each month, and uses it to pay bills. “I’ve learned to only spend money I have. [The RushCard] has really helped me manage my finances better.”