The final few days before a paycheck can be nerve wracking. That’s especially true for poorer Americans who generally have little wealth, no emergency cash, and limited access to credit to help them bridge the gap during a difficult time. And for those who rely on the alternative financing of RushCards—prepaid debit cards aimed specifically at underbanked Americans—things have gotten much more stressful after their cards stopped working a week ago.
RushCards aren’t tied to a bank account, and getting one doesn’t involve a credit check. People can buy them online and then load the card with a specific amount of money. They can also have their employer direct-deposit checks directly to the card. The cards can be used at stores, online, or anyplace one might use a normal debit card, which makes it more convenient than cash or checks. But, there are shortfalls. Though they are insured, such cards don’t necessarily fall under the same regulations as bank cards. And without the backing of a traditional bank account, a technical glitch—like that experienced by RushCard—is much more dangerous, because it leaves users without any way to access their money. They can’t, for instance, head to a local branch with their account number and withdraw money or pay bills.
The complaints from users started rolling in early last week—cards weren’t working, balances were erroneously listed as zero. Many who called customer service weren’t able to get through, some who did connect were told their accounts couldn’t be found. Others said that paychecks, which they have direct deposited onto their cards, hadn’t shown up on time. For just about anyone, this scenario sounds like a nightmare. But for those who are already pinching pennies, missed or late paychecks and denied account access can be disastrous—leading them to take out loans of last resort, like those made by payday lenders, or, failing that, leaving them without money to pay rent, buy groceries, or put gas in their cars, which in turn can make it hard to get to work, which in turn can lead to being fired.
@RushCard it's been a whole week without money, it's hard out here. Single mother no help. I work hard for my money and now I can't get it😡— Brittany Louis (@Induetime_loyal) October 19, 2015
Russell Simmons, who is famous for co-founding Def Jam Records, signing groups like Public Enemy and Run DMC, and starting multiple businesses, including clothing lines—started RushCard 12 years ago. Putting a hip-hop heavyweight like Simmons (who often refers to himself as Uncle Rush) behind this financial product helped it appeal to a very specific crowd—largely black and Hispanic Americans, a group that also makes up a disproportionate share of the country’s poor.