The American Express (AXP 1.56%) Bluebird account is a rather unique financial product. Not quite a prepaid debit card and not quite a checking account, it combines some of the most popular features of each at a bare minimum of expense to account holders. Here's a primer on this innovative account, and whether or not it might be right for you.
American Express has its own species of Bluebird. Image source: Getty Images.
What is Bluebird?
American Express Bluebird was developed in partnership with Walmart (WMT 2.58%). It is a new type of financial account that was designed to be convenient and cheap, while offering consumers more features than a prepaid debit card account with more flexibility and lower fees than a checking account. I know that's a mouthful, so here are some of the features available to Bluebird account holders:
- Direct deposit
- Online and mobile bill pay
- Mobile check deposit
- Network of over 24,000 MoneyPass ATMs that allow $0-fee withdrawals ($2.50 fee is charged for an out-of-network ATM withdrawal)
- Ability to add cash to the account for free at any Wal-Mart cash register
- Ability to transfer money from your checking or savings account for free
- Unique "family account" feature that lets you create individual sub-accounts for up to four other people. This is intended for college students, teenagers, and other relatives, and the account holder can set spending limits and control ATM usage
- Bluebird SetAside linked savings account -- customers can set up a one-time or recurring transfer to save money for large expenses
- Checks -- Bluebird account holders can write physical checks (unlike other "checking alternatives"), and don't have to worry about overdrafts. They simply pre-authorize the check online before writing it, and it's certain to clear.
- Participation in Amex Offers – discounts and offers that can save you money on shopping and dining
- Participation in American Express Membership Experiences -- advance ticket sales to concerts, sporting events, and theater performances
- Roadside assistance hotline
- Purchase protection
Why you might want Bluebird
There are plenty of reasons to like the American Express Bluebird account. For one thing, it's a good value. The account charges no monthly fees, and has no fees for overdrafts, foreign exchange transactions, bill pay, or account inactivity. And, there is no minimum balance requirement.
Unlike traditional checking accounts and credit cards, there is no credit check requirement. Customers simply register for an account, and then add funds to their account.
Finally, Bluebird is convenient and easy. Adding funds, withdrawing funds, and paying bills are designed to be easier than with competitors' products, thanks to the variety of deposit and payment methods available.
Potential drawbacks
Unlike other American Express card accounts, the Bluebird account won't help you build credit. Since there is no credit check required, the account doesn't report to the major credit bureaus. Consumers whose goal is to establish or re-establish credit might be better off with a secured credit card instead (or in addition to the Bluebird account).
Bear in mind that American Express cards aren't accepted everywhere -- perhaps the biggest drawback of the Bluebird account. After all, one of the main goals in opening a financial account is so you can use your money wherever you shop without having to carry cash or an alternative form of payment.
According to one poll, only 60% of small businesses that take debit/credit cards accept American Express. For comparison, the poll found that Visa cards are universally accepted by businesses that take cards, and MasterCard is accepted by 98%. So, the Bluebird card may not be a good idea as your only card.
How does it compare to the competition?
There are plenty prepaid debit cards and "checking account alternatives" out there, but Green Dot (GDOT 2.81%) is the most direct competitor to the American Express Bluebird in terms of features.
Green Dot is arguably better than Bluebird in a few key ways. For example, the Green Dot card is a Visa or MasterCard, which as I mentioned before, are more widely accepted than American Express.
However, there are many reasons why Bluebird is the better option. Green Dot has no check-writing option, and charges a $5.95 monthly fee unless you qualify for a fee waiver. There is a card-replacement fee (Bluebird doesn't have this) and a 3% foreign transaction fee.
Conclusion
While it won't help you build credit and isn't as widely accepted as competing products, the American Express Bluebird account is a great product for people who want a good alternative to a checking account. With low fees and convenient, useful features like check deposits, mobile banking, and check writing, the Bluebird account is definitely worth looking into if you're in the market for a new way to pay your bills and store your money.
