Have a Suze Orman Approved card? What to do now.

Launched to great fanfare not too long ago, Suze Orman's prepaid Approved Card is closing up shop, according to a report in The New York Times. While the personal finance guru has been silent about this development, cardholders report receiving letters that say that the Approved Card will no longer work after July 1, 2014.

You may be wondering, “Can a prepaid card just stop like that?” The answer in this case—and in many others—is yes. That’s because most financial services contracts, usually called the terms and conditions, include a clause that says something like this from the Approved Card website: “We may amend or change the terms and conditions of this Agreement at any time. We may cancel or suspend your Card or this Agreement at any time.

So what is an Approved cardholder to do?

If you have an Approved Card, it’s a good idea to stop loading funds onto the card (more on that below for those who have direct deposit) and to spend it down to zero as soon as you can.

While you can ask for a check for your remaining balance, you may want to spend every cent because the Approved Card might not refund all your money. Why? We found this in the terms and conditions: “The Issuer reserves the right to refuse to return any unused balance amount less than $1.00.

To spend every cent you may have to ask for a “split” transaction—that is, tell the cashier you want to pay using two payment methods such as the card and cash. Not all merchants will do this, but many will. This should get your balance to zero.

Check out Consumer Reports Ratings of prepaid cards, and read how Consumers Union, our policy and advocacy arm, is helping consumers deal with other financial issues at DefendYourDollars.org.

"Don’t load any more money and spend what is left" is probably insufficient advice for those who’ve been using their Approved Cards as bank account substitutes—say, by loading via direct deposit, and using bill pay and other features. If that’s you, you'll now need a new account.

We’ve been tough on the prepaid card industry because many products were fee-heavy and feature-light. But competition has brought fees down and many prepaid cards have features that make the best prepaid cards low-cost, effective and nonpunitive payments tools. We rated prepaid cards last year and found several that scored “very good”—including the Approved Card. While it will no longer be available, other “very good” prepaid cards, such as Green Dot and Bluebird, are still on the market. Since fees and features vary widely, we strongly urge consumers to shop around. Here are tips to help you pick a new prepaid card.

Depending on how and why you’ve used your Approved Card, you may want to consider getting a low-fee, no overdraft bank account instead of a prepaid card. Bank accounts, unlike prepaid cards, come with mandatory federal protections (though prepaid cards often provide them voluntarily). Some to consider are KeyBank’s Hassle-Free Account, and Bank of America’s SafeBalance Banking account. Your local credit union may have a similar account. As with prepaid cards, be sure to shop around.

Once your new account is set up, contact your employer or benefits provider and ask that your paycheck or benefits be routed to your new account.

Make a list of the payments you make out of your old account each month, and provide those billers with your new account information. Be sure to do this in plenty of time to avoid late fees and other hassles associated with missed or late payments.

—Christina Tetreault

This article first appeared on the website of DefendYourDollars, published by Consumers Union, the policy and advocacy arm of Consumer Reports.

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