Bluebird Not FDIC Insured

Discussion in 'General Discussion | Credit Cards' started by merice107, Nov 14, 2012.  |  Print Topic

  1. merice107

    merice107 Silver Member

    Messages:
    390
    Likes Received:
    361
    Status Points:
    500
    I saw on a blog this weekend (I can't seem to find it anymore but here is an article I found when googling "bluebird not fdic" http://www.cutimes.com/2012/10/09/no-fdic-coverage-for-bluebird-from-amex-walmart) that one of the negatives of Bluebird is that it is not FDIC insured. I found it interesting that with all of this talk of Bluebird lately, this was the first time I read anything mentioning that on these mile blogs (or I might have missed it?). Is it really that big of a deal? If you load the $5000 a month on it, could Bluebird shut down and then you would be out $5000? Or would American Express have to shut down?
     
  2. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    American Express would have to go into bankruptcy or be taken over by the FDIC for there to be risk to cash in a Bluebird account.

    I'd rate funds in Bluebird as much safer than my stocks and mutual funds!
     
    wrxmom, daemon14 and merice107 like this.
  3. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    Of course its not FDIC insured ... its a Prepaid Debit card for all intent and purposes but with more features (bill pay etc). It is not a deposit account being held by a Financial institution ... thus the Federal Deposit Insurance Corp would not cover it.

    Huh ? why would Amex shut down? If Amex decides to cancel Bluebird (which prolly wont happen considering how much they + Walmart are investing in this) they would most likely just send you a check of the balance in your account ... no big deal
     
    Lufthansa Flyer likes this.
  4. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    Why would FDIC take over AMEX ? Unless you're talking about AMEX Bank ...
     
    Lufthansa Flyer likes this.
  5. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    Yes.
     
    merice107 and edekba like this.
  6. servo

    servo Silver Member

    Messages:
    736
    Likes Received:
    1,031
    Status Points:
    825
    CU's are a bit worried and are on the offensive to keep their members from running to AmEx. I work as a consultant in the industry, and it's really scaring them, especially after losing as much interchange revenue as they did due to the Durbin Amendment in Dodd-Frank. CU's strengths are more solid foundations, security, etc, because of NCUA insurance (same as FDIC but for CU's), but also because of how they are managed (few CU's had major issues with mortgage backed securities), and lower fee structure. However, where they are weak, is in flexibility.

    It's not really a major concern, but it's a power play by CU's to get you to think it is.
     
    viguera and merice107 like this.
  7. merice107

    merice107 Silver Member

    Messages:
    390
    Likes Received:
    361
    Status Points:
    500
    That makes sense. I figured it wasn't that big of a deal since not a lot of people brought it up.
     

Share This Page