Multi-platinum-selling teen idol Justin Bieber has reportedly signed a deal to endorse the SpendSmart prepaid debit card, enlisting his 50 million Facebook fans and 32 million Twitter followers to help market the card to teenagers.
Bieber is the latest in a growing list of celebrities – including the Kardashians and Magic Johnson – to endorse prepaid cards. The 18-year-old pop star will serve as a “brand ambassador,” promoting the card on social media networks and through a series of videos that encourage responsible spending by teens, as well as offering chances for cardholders to win prizes.
The SmartSpend card is issued by the San Diego company BillMyParents, which touts its prepaid card as a means for parents to teach teenagers money management skills and to maintain greater control of their children's spending. Parents can opt to receive text alerts each time the card is used, block the card's use at specified stores, use a smartphone app to keep track of the card's balance, or temporarily freeze the card if they disapprove of how it is being used.
Increasingly, banks and finance companies are entering the market for prepaid debit cards, which are not currently subject to as many government regulations and consumer protections as conventional credit cards. Teens, who are reported to spend more than $200 billion each year, have served as a special focus for some financial corporations.
SpendSmart, which can be used anywhere that MasterCard is accepted, carries a monthly fee of $3.95. Other fees include loading charges of $0.75 from a checking or savings account, or $2.95 from a debit or credit card; ATM charges of $1.50 per withdrawal; a $3 inactivity fee if the card is not used for 90 days; and a $7.95 replacement fee to replace a lost card.
BillMyParents anticipates that the marketing campaign for its SpendSmart card will begin in the next few weeks.