It's only natural that financial services companies enlist the help of celebrities to sell their goods and services too. And while some of the products may sound like good initially, remember that these celebs are being paid to peddle the goods.
We've compiled a list of five financial products endorsed by some famous faces that you really shouldn't take at face value. Remember that everyone's financial situation is different, so be sure to do your due diligence and review any terms before buying into one of the many financial products, services, and companies you see on TV.
Henry Winkler: One Reverse Mortgage
Best known for his days as Arthur Herbert Fonzarelli (aka The Fonz) from "Happy Days," Henry Winkler has recently become the spokesman for Quicken Loans' reverse mortgage business.
What It Is: Typically aimed at seniors, a reverse mortgage provides homeowners with monthly payments based on the equity of their house. As the homeowner, you retain the title to your home until you die, move or sell the home, at which time the principal and interest owed on the loan is repaid from the sale proceeds.
The Bottom Line: While a reverse mortgage may be a good choice for seniors in good health who need additional income and do not plan to leave their houses to their heirs, not every homeowner's situation fits that description. Even if The Fonz tells you "Ayyyy -- these are great," be sure to do your research, shop around, and make sure you're getting terms that work for you. Otherwise, you might be jumping the shark with your finances.
Russell Simmons, the Kardashians, and Suze Orman: Prepaid Debit Cards
Prepaid debit cards are a hot item to endorse. After all, what celebrity wouldn't want their fans thinking about them every time they open their wallets? Record executive Russell Simmons' RushCard was one of the first on the scene in 2003. Reality-TV family the Kardashians' pushed a card in 2010. Even celebrity financial expert Suze Orman got in on the action with her Approved card in 2012.
What It Is: Think debit cards without a full bank account backing them up. Customers can add money to their cards, then use them to pay bills, shop, and for other transactions.
The bottom line: Prepaid debit cards have become a popular and lucrative business for the institutions that sell them, but they are frequently less of a deal for the people who buy them. Often promoted as a good tool for consumers who do not have access to traditional banking, prepaid cards usually come with high fees that pop up on almost any transaction. The Kardashian prepaid debit card cost around $100 a year just to get started, which was so outright predatory that the product was discontinued after three weeks -- and only 250 cards were ever sold. The RushCard has monthly fees tied to it, though it is advertised as a low-cost option for consumers. And while Suze Orman's card has some additional perks, like free credit reports and credit monitoring for customers, financial experts still question the fees for monthly use and transactions.
Prepaid cards are a great option for a few situations, like if you're going on vacation and don't want to take cash; if you want to give a teenager access to money without the ability to overdraw their account; or for online shopping or bill payments. But buyer beware: Though the stars have aligned for prepaid cards in TV ads, make sure you read through the fee schedules to be certain the card you choose makes sense for your needs.
Montel Williams: MoneyMutual Short-Term Loans
Need cash fast? Former talk-show host Montel Williams has been spouting the praises of MoneyMutual for quite a while now.
What it is: MoneyMutual is a middleman, connecting customers with lenders to make deals on loans. Aimed at people who need short-term loans for things like bills or groceries but have poor credit, MoneyMutual's loans have very strict terms that may not be the best option for most customers.
Payday loans, like the ones provided through MoneyMutual, usually come with very high interest rates, penalties and fees. The fine print on Montel's commercials makes it clear that the interest on these loans could climb higher than 100 percent -- effectively meaning you'd repay more than twice what you borrowed. There are also loan payoff time limits. If you don't meet them, you'll incur additional costs on top of the high interest you are already paying.
The bottom line: This financial product is almost never a suitable choice. However, if you find yourself in the need of some fast cash (when there's no other way to obtain a loan or pay for an emergency expense with a credit card), please be sure to review all of the information (terms, fees, rates, etc.) before signing on the dotted line.
Betty White: Lifeline Program Insurance Products
We all love her. Most famous for her role as Rose on "The Golden Girls," Betty White has made a comeback in recent years -- showing us that she is just as fun and spunky as ever. And it may be her fun-loving spirit that attracted The Lifeline Program to her.
What it is: Lifeline buys life insurance policies from people who determine that they no longer need them in exchange for a cash settlement -- aka, a viatical settlement.
The bottom line: A viatical settlement is a simple way to get cash out of a life insurance policy before you die, and there are situations where such a settlement can be useful. For example, a divorcee who no longer needs a policy or a senior who may be thinking of letting the policy lapse instead of continuing to pay premiums could benefit from selling it. But it can be hard to figure out whether Lifeline is really giving you a good deal for your policy, because its fair value is based on life expectancy, mortality tables, and similarly complex concepts. Admittedly, getting something is better than getting nothing, but shopping around may get you a better deal. Moreover, you should talk with your insurance provider to see if other alternatives are available that may give you more money or benefits than simply selling your policy to Lifeline.
Hulk Hogan and Troy Aikman: Rent-A-Center
It's hard not to get pumped up when Hulk Hogan comes on the screen and does his shtick. Add Troy Aikman and you have a celebrity endorsement dream team. Even so, customers need to be aware of the math behind the Rent-A-Center business plan.
What it is: Aimed at customers who need or want new furniture, appliances or electronics but don't have the cash to pay up front or the credit to buy from a traditional store, Rent-A-Center allows customers to participate in rent-to-own plans, paying low rates for their goods.
The bottom line: RAC's plan sounds great -- preapproved, no credit check, no growing interest, flexible payments, etc. -- but a close look at the payment terms may cause a bit of a shock. For instance, say you want to get the advertised 15.6-inch Asus laptop computer using the company's low weekly payments. At $19.99 per week for 65 weeks, you would pay a total of $1,299.35, but the same laptop could be purchased from numerous retailers for $400.
Hulk may be a former WWE superstar and Aikman may be a former MVP quarterback, but neither of these guys can decide whether RAC's terms are right for you. Before you do your best Hulk impression or start your touchdown celebration, check out the total cost of the merchandise you want and be sure the rent-to-own plan is the best option for you.
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Jessica Alling is a contributing writer to The Motley Fool.
[CORRECTION: The slides regarding reverse mortgages and Lifeline Program Insurance Products were updated at 5 p.m. Friday to clarify the explanations of how those products work and whom they might benefit.]