Serve From American Express: A Digital Prepaid Account With Some Twists
I have no doubt that in five or ten years, apps on our phones will surpass the credit cards in our wallets as the primary way we pay.
Serve, a new digital prepaid account from American Express, takes us a step in that direction.
Recently Amex approached me about covering this new product with an offer: They would give me a Serve card, loaded with $250, to try out, and another one loaded with $250 to give away. How could I pass up free money for both of us?
Now, I have decided to use the $250 I received for charity, and I will announce how to win the second $250 Serve card on my email list and in an upcoming post.
Here, let's take a look what makes Serve different. (Also, if what you read entices you, now through September 30, American Express and Verizon Wireless will give you a $25 bonus when you load a new Serve card with $25.)
What is Serve?
American Express describes Serve as "…a safe and highly flexible alternative to debit and other prepaid products."
At first, I thought Serve was another prepaid debit card, albeit one that doesn't carry all the fees typically associated with this kind of card. But once I created an account and started poking around, I discovered what Amex means by saying "Serve is designed to be a digital product". In a nutshell, there are features that transcend, say, just another debit card linked to your checking account.
Here are some of the things you can do with Serve:
Sending and requesting money
Serve allows you to instantly request or money by email, text, and even Facebook, making it an easy way to settle up with friends. To send someone else money, they must also have a serve account, but you can request funds from anyone with a debit or credit card. This can be useful for collecting funds from that one friend who's always asking you to "spot him" for dinner.
Collect money for events or charity
If anything makes Serve truly different, it might be this: With Serve, you can publicly raise money…for just about anything. Whether you're planning a party, collecting funds for a group trip, or raising money for charity, you can create an event on Serve, set your deadline, goal, and minimum contribution amount, and share the fundraiser with friends through email, text, or social media.
Selling your stuff
As a personal finance blogger, I'm a big fan of selling stuff you don't use anymore. It can be money in your savings account, baby! Although Craigslist and eBay are old stand-bys for selling unwanted junk, I'm finding more and more used items through groups I belong to on Facebook. Enter Serve, which allows members to quickly create a listing for an item for sale and distribute it to your networks. People can then pay you through Serve.
Other features
Serve is backed by American Express – which means 24/7 award-winning customer service (and in my own personal experience, Amex's customer service is more than just a notch above the so-called service delivered by other banks). With Serve, you also get other benefits of an American Express card such as:
- Security and data protection
- Purchase protection: Things you buy are protected from theft or accidental damage for 90 days
- Roadside assistance
Why use Serve over a credit or debit card?
Serve's digital features make it more like a PayPal account than another prepaid debit card. But as a prepaid card, why use Serve over a regular credit or debit card? It's a fair question, and I'd love to hear your thoughts in a comment.
For one, there are at least 10 million Americans who don't use bank accounts. And in an increasingly electronic world, that can be a problem. Prepaid cards like Serve provide a good solution.
Perhaps more relevant to many of you, I don't recommend using the debit card tied to your checking account for everyday purchases. Lots of people do it, but it's risky. At least once a month I know someone who has money stolen directly out of his bank accounts because somebody got a hold of his debit card data. In most cases, the stolen money is returned. But the money was stolen from your bank account, often times triggering overdraft charges and other headaches that can take weeks to clear up.
To reiterate: It's just not smart to use a spending card that's not directly linked to your primary financial account.
Finally, there appears to be shifting opinions about credit cards. A recent survey by Mintel research found that nine out of 10 Millennials say credit cards are "dangerous". Having been to the depths of credit card trouble myself, I know that danger all too well, but I still use credit cards responsibly because I think they're a better tool than cash or debit cards.
But if you're wary about credit cards at all and want an alternative to using your bank-issued debit card for your everyday spending, Serve is attractive. Unlike a lot of competing prepaid cards that charge fee after fee, Serve touts no annual or monthly fees, or per-transaction fee – all common with other prepaid options.
What are the fees?
Obviously, nothing is free, but at first blush, Serve's fees seem fair.
ATMs. There is no fee for the first ATM withdrawal each month. Subsequent withdrawals are $2.00. (Keep in mind that the ATM you use may still charge a fee.)
Loading the card. There is no fee if you load the card online from a U.S. checking account. If you load the card with a credit card, the fee is 2.9% of the load amount plus $0.30 per transaction. This fee is waived until March 15, 2013.
Sending money/withdrawals. No fees apply.
If you want to learn more, check out Serve now. Through September 30, 2012, Amex and Verizon Wireless are running a promotion that will load $25 onto your new Serve account when you sign up and load $25 yourself.
As for me, I'm going to load up my card and start using it to buy items I will be donating to local charities. Next week, I'll report back on the experience and announce how you can win a Serve account loaded with $250! In the meantime, let me know what you'd like to know about Serve, and I'll see if I can't get your questions answered!
Disclaimer: As I think I made clear, American Express is giving me $250 on a Serve account to try out this product, and they will award another $250 to one lucky reader in next week's post. In exchange, I have agreed to write this commentary, but the views and opinions expressed here are my own, and American Express nor anybody else has had editorial control over this post.
Read more at http://www.moneyunder30.com/serve-american-express-review#i2OL4fSGxYdr3rhz.99
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