So, why are American Express and Wal-Mart partnering to offer free prepaid cards that they hope will eventually become a lot of folks' new checking account-type service?

Because they get paid "interchange" fees every time you swipe one of their Bluebirds.

There was a law just passed that broke interchange fees (the fees that merchants get charged when you use a card at their establishments) into different categories, with different costs per swipe, depending on the type of card (credit, prepaid, debit) you use; and guess what end of the interchange fee structure the no-fee cards will feed off of?

Of course, the Bluebird card will garner the highest interchange fee. That's where they (American Express and Wal-Mart) will initially make their money. That is, until millions of customers and consumers start flying high with their Bluebird cards, then they'll inch into more fees.

Oh, don't worry that Wal-Mart is paying the higher interchange fee (if you caught that). Not only will they eat off American Express' plate of those fees, they will pass along the higher interchange fees to their loyal customers, the ones who go there for low prices all the time.

The whole argument for lowering the interchange bank fee monopoly in the first place was because higher fees were being passed along to consumers by the merchants who were being charged by the processors and banks.

See how some things come full circle? Or as Dave Mason sang, "It's Like You Never Left."

But, that's not my problem with these prepaid and new-fangled bank-alternative cards.

The problem is that the money you use to pay for your card, which goes to the card company, isn't insured. There is no FDIC insurance on the money you give card companies, on the money sitting there that you haven't spent by swiping your card yet.

They could go under. American Express was closer than you think. And you don't think it could happen again?