When in predominantly low-income neighborhoods, chances are you’ll find a number of EZ Loan stores offering you “quick cash” that usually results in long-term paybacks. These loan services are known to target members of the black and brown brigade.

I don’t know about any of you, but I would rather start practicing for my audition at the strip club than take on an EZ Loan, payday loan, EZ Auto Loan, or similar type of loan that I know is trying to sucker me into more than what I bargained for.

Although some have managed to avoid this financial pitfall, there is a new trick up lenders’ sleeves: prepaid credit cards.

Advertisement

Like the EZ Loans of the world, prepaid cards are overwhelmingly targeting poorer minorities.

While presented as something reminiscent of a credit card, these pieces of plastic work more like a debit card – only with a lot more hidden fees

There is the one-time “set-up fee,” the fee for withdrawing money from an ATM, or in some cases, fees for simply checking your balance online. Depending on your prepaid card provider, you may be hit up with a $10 fee just to get a paper statement.

Advertisement

Some companies can charge $1.00 to talk to a customer service rep; .50 cents to speak to a machine.

There may be a monthly maintenance fee whether you use the card or not.

Consumers who are under the impression that they can use their card whenever they feel like may end up discovering that by the time they’re ready to use their card, there’s not much money left on it. And if you try to cancel the card, don’t be surprised to be charged as much as $15.

Advertisement

The Walmart Moneycard has managed to score a lot of traction since its inception. Although the store has lowered its fares, those who labeled it a rip-off upon its debut remain unconvinced.

However, with the economy making it difficult for many to score any form of credit, these prepaid cards are growing in popularity. In fact, MasterCard plans to launch a massive TV push for its own card.

And it’s not just big white faces shilling these these things out.

If you watch any programming catering to black folk, you are bound to see an ad for Russell Simmons’ Rush card.

Advertisement

On his product, Russell Simmons boasts, “The RushCard was designed to provide access and financial empowerment to all.” In the ad itself Simmons adds, “We created the RushCard so that everyone will have access to the American Dream.”

With the sky essentially falling due to the failure of massive financial institutions, are pushing cards loaded with hidden fees akin to those that prompted the sub-prime mortgage crisis the right message to send? Some argue NO and criticize Russell Simmons for taking part in an operation long accused of hurting people of color.

On “The Takeaway,” a morning radio show on WNYC and PRI, Syracuse professor Dr. Boyce Watkins likened Simmons and his RushCard to another type of man known for making certain promises.

Advertisement

Watkins said: “Russell, he really—it's a very interesting sort of idea here—he's saying 'I'm giving everyone access to the American Dream,' but I never really knew the American Dream consisted of having a piece of plastic that puts people further and further in debt.   But even a pimp that helps—that quote unquote helps—a young woman get off the street, he can say I helped you because you were homeless when I met you and now you're not.”

While Watkins compares Simmons to men with swift backhands, others argue that for the 80 million people in America who don’t bank, Simmons and others pushing prepaid cards are merely making their lives easier. It's a point Simmons argued recently via a post on the site Global Grind

What say you?

In today’s economy, have we no other choice but to turn to prepaid cards? Have you?

I want to hear from you.

E-mail me at therecessiondiaries@gmail.com

Michael Arceneaux hails from Houston, lives in Harlem and praises Beyoncé’s name wherever he goes. Follow him on Twitter.