Online Bank Review: Bluebird by American Express

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Online Bank Review: Bluebird by American Express

One of the many challenges people face when opening a checking account is their credit. This is partly because in some instances, banks may refuse to open checking or savings accounts for those who have had financial difficulties. It is important to understand these credit checks are not the type you’d normally face if you were applying for a loan. Instead, the checks are based on your prior banking history; bounced checks and even accounts which may have been closed because of overdue fees from bounced checks can prevent you from getting a checking account. In these cases, an online bank can be very helpful.

Enter Bluebird by American Express

American Express decided to address the issue head-on and help those with less than ideal banking histories get a fresh start. How? By offering a low-cost checking account with an attached debit card. Here’s what you should know about Bluebird by American Express:

  • No fee checking – contrary to many traditional banks, Bluebird has no fees for many of their services. Users don’t pay for making deposits, writing checks nor do they incur fees when they ask for a payment to be stopped. Bluebird also provides users with free printed checks. While there are many ATMs that charge fees, have access to more than 24,000 MoneyPass® Network ATMs that incur no fee with Bluebird card usage.
  • No credit checks – users need not worry about their credit report when opening a Bluebird account. Simply navigate to the website, set up your account and deposit funds into the account and you’ll be sent free checks and a debit card. Bluebird works like any traditional checking account; you can direct deposit your paycheck and make mobile deposits free of charge.
  • Savings and other accounts – users of Bluebird can use what are called “set-aside accounts” which allow them to save money for specific purposes. While these funds are part of your overall balance, and you can move the funds back and forth at will, they work similar to a savings account. Keep in mind, unlike many savings accounts, users earn no interest on these accounts.

How Bluebird Keeps Costs Down

Bluebird account holders do sacrifice some benefits by using their Bluebird account. In many cases, these sacrifices are worth the added benefits. One of the concerns some users have is the lack of FDIC insurance. Keep in mind however, that American Express is a well-established company and chances of them going bankrupt are slim.

Users of Bluebird accounts must place a pre-approval code on any check they issue. This means unless you have money in your account, you are unable to write a check. Prior to getting the code, you must input the amount of the check into your Bluebird account and the amount of the check is immediate deducted from your available balance. The good news about this is it makes it impossible to write a bad check which would have an adverse impact on your credit and incur additional fees.

Additional Benefits of Bluebird

Bluebird users also have access to “Walmart Bucks”. Using this program, anyone who shops at Walmart has the ability to input their receipt numbers into a special program that compares prices across stores in their area. If Walmart prices are higher than other stores, uses get the difference in credit. This credit can be “banked” at Bluebird and users can then apply their Walmart bucks to their Walmart.com purchases.

Bluebird account holders can easily transfer money to friends and family and pay bills online similar to other checking accounts.  There are monthly limits on deposits and withdrawals and no account is ever allowed to have a balance in excess of $10,000.

Bluebird also offers “family accounts” where the primary user can issue up to four additional ATM cards to anyone over the age they choose. These cards can have pre-set limits as well as ATM limitations.

Bluebird offers all account holders mobile banking options, buyer protection for purchases made with their debit card as well as fraud protection. Users also have access to roadway services, special ticket pricing and other AMEX benefits.  Overall, for many consumers, this is a great checking account alternative, particularly for those who have faced challenges with checking accounts in the past.