Justin Bieber is getting paid $3.75 million—plus potential royalties and a stock option—to promote a prepaid debit card to teens, the New York Times reports. And, not surprisingly, the SpendSmart card has high fees, a typical and controversial part of the prepaid card industry. Specifically, there's a $3.95 monthly fee, a $1.50 ATM withdrawal fee (in addition to ATM surcharges), a 50-cent fee to check your balance at an ATM, a $3 fee if the account is inactive for 30 days, a $7.95 fee to replace your card, and fees of anywhere from 75 cents to $2.95 to load money onto the card.
A lawyer for the publisher of Consumer Reports says that while the fees aren't quite as bad as those attached to many other prepaid cards, "We would not recommend that parents use prepaid cards for their teens." Since it doesn't help them establish a credit history or any sort of banking relationship, opening up a checking account is a better solution, she says. Another consumer education expert agrees: Sure, SpendSmart's card may not be as bad as the one the Kardashians hawked, but "that’s like saying my broken arm is not as bad as your broken arm," he said on a recent Fox appearance.