T-Mobile Rolls Out Prepaid Debit Card

T-Mobile is taking its Un-Carrier initiative a step further and entering the banking industry. That’s right: starting today, T-Mobile customers can sign up for a Mobile Money prepaid debit card issued by Bancorp and branded by the telecom.

The company says the new service is geared toward the millions of Americans that don’t have access to a checking account and are often forced to rely on payday loans, which CEO John Legere describes as a “predatory business.”

“We’ve already transformed how Americans use and pay for phones, tablets and wireless service; why stop there?” Legere said in a press statement. “Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses – just for the right to use their own money. Mobile Money shifts the balance of power for T-Mobile customers and keeps more money in their pockets.”

If you’re scratching your head wondering what prepaid debit cards have to do with T-Mobile’s primary business, you’re probably not alone. For its part, the carrier says it has experience in the banking arena; it cites the ability of its subscribers to pay for devices over time as an example of debt financing. If you think that’s a bit of a stretch, again, you’re probably not alone.

It’s also worth noting that while payday loans are rarely in the best interest of the debtor, prepaid debit cards aren’t exactly the best alternative. They’ll do little if anything, for instance, to improve a customer’s credit rating. In short, T-Mobile’s altruism should be taken with a grain of salt.

“It’s ridiculous that families, especially those who can least afford it, have to pay so much for basic check cashing services that many of us take for granted,” said Mike Sievert, chief marketing officer for T-Mobile. “Mobile Money levels the playing field to put money back in consumers’ pockets for important things – like bills, groceries or vacations. The typical household using  a check casher to cash their paychecks could save about $1,500 per year, and customers tired of getting hit with overdraft fees can switch and save an average of $225 a year.”

The T-Mobile prepaid debit card is available online and at participating retail locations. The card will also be sold at Safeway stores beginning next month.