Swipe envy

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All the cool kids have credit cards. What if you don't? What if you are so young, so poor, so uncool that you can't get one? Do you have to stoop to paying for your food with actual money? Not any more! These guys have the cure for swipe envy!

Look at the poster in the picture. This fast food company (name slightly obscured) is marketing their paid-value card to people who can't get a credit card, but wish they had one so bad that they'll settle for a paid-value card that kinda looks like a credit card.

Of course, I understand the attraction to the merchant of a paid-value card. They've already got your money, so they're pretty sure you're going to buy stuff from them. (And, if you don't, that's okay too--see above where they've already got your money.)

From the point of view of the purchaser, a paid-value card is a dead loser:

• You take perfectly good money that you can spend anywhere, and turn it into non-money that you can only spend at one place.
• You miss out on the chance to earn interest until you spend it.
• Most paid value cards charge "inactivity" fees (and other fees) to make it easy for them to keep the money that you've given them without having to provide any goods or services.
• You have no protection in the event the company declares bankruptcy (or, for that matter, in the event the company just decides that they'd rather keep your money and not give you anything).

Now, the disadvantages of a paid-value card are pretty obvious. The only reason I can imagine wanting to get one is if I was paying for someone else's food, and worried that if I provided cash, the guy would blow it all on something like bus fare or laundry. (Of course, it doesn't really work even for that. The guy who would really rather spend the money on something frivolous like textbooks can always find someone who wants food to buy the paid-value card, perhaps at a small discount.)

I feel sorry for the guy who's so ashamed of not having a credit card that he'd fall for a marketing ploy like this. It also offends me to see companies behave this way--I couldn't patronize a company that ran an ad like this. I expect, though, as the credit squeeze makes credit a lot harder to come by (not just mortgages), we'll see more and more ads like this, marketing to the folks with swipe envy.