Wal-Mart and Amex bank on Bluebird

Wal-Mart ratcheting up its efforts to go after the unbanked: teaming up with American Express to offer a prepaid debit card called Bluebird.

USA-WALMART BANKING - The card will have no minimum balance and no monthly, annual or overdraft fees.

Users can make deposits by smartphone and have access to mobile bill paying.

It comes at a time when the percentage of people with free checking accounts is falling- now just 39 percent, down from 76 percent in 2009.Credit.com's Michael Schreiber:

SOUNDBITE: MICHAEL SCHREIBER, EDITOR IN CHIEF, CREDIT.COM SAID:

"Even though regulations have limited the amount and type of fees that banks can charge, their revenue from these fees continues to climb. So fees are a big problem for people"

The average monthly service fee on non-interest checking account set a new record last year: $5.48 cents, up 25 percent from the previous year. The average balance to avoid that fee? up 23% to $723.

BOBBI REBELL, REUTERS REPORTER SAID:

And the number of consumers who don't even have a bank is on the rise in recent years. According to the FDIC, more than one in 4 households either doesn't have a bank account or relies on non-traditional financial institutions like Western Union for their banking.

In the past, Wal-Mart has said 85 percent of transactions at its U.S. stores are in cash- a sign many of its consumers may be among those without banks.

MICHAEL SCHREIBER, EDITOR IN CHIEF, CREDIT.COM SAID:

"For a lot of people who maybe don't want to pay the fees associated with bank accounts which are estimated at up to $250 a year this could potentially cut those fees in half if you use the card smartly. "

But buyer beware. Bluebird may be a good bank alternative for poorer Americans, but unlike banks- its deposits are not insured by the FDIC.

Bobbi Rebell, Reuters.