Once considered an alternative to banks for individuals facing qualification challenges, prepaid debit cards like those issued by NetSpend have experienced a surge in popularity over the years.
Americans now spend approximately $37 billion annually using prepaid cards.
There are a lot of people that are looking for alternatives to the traditional banking method. Many are opting for prepaid Visa debit cards instead of traditional checking accounts, while others use them as supplementary tools alongside their regular banking accounts.
Is NetSpend Legit?
Yes, NetSpend is a legitimate prepaid debit card company providing alternative financial services to those unable to work with a traditional bank, credit union, or other traditional financial institution.
NetSpend cards are protected by the FDIC and covered by Visa or Mastercard’s Zero Liability Protection, providing the same level of protection as other card types.
NetSpend also prioritizes online security, using Secure Socket Layer technology to encrypt customers’ information during submission and transfer.
NetSpend’s Background and Trustworthiness
Established in 1999, NetSpend currently serves over 10 million customers. If you’re on the fence about trusting one of these prepaid debit cards, that should help build confidence.
That being said, NetSpend is not cheap. If you have a basic account, you will be charged $1 for every purchase you make with a signature and $2 for every purchase you make using your pin. I read through more than 50 complaints about NetSpend, and almost all of them have to do with not understanding the fee structure.
While it may not make them the most affordable way to do banking, it doesn’t make the company a scam. I detail other fees that further down in the post, and there are ways to limit those fees.
Just make sure you know what you will be paying before you set up an account with any prepaid service, and you can save yourself a lot of headaches.
NetSpend offers three different plans: the Pay-as-You-Go Plan, the Free Advantage Plan, and the Premier Advantage Plan.
Each plan comes with its own fee structure and advantages. Although no minimum balance is required, overdrafts are not permitted.
NetSpend provides several advantages not typically offered by other prepaid cards or even some traditional banks. One of those is that you can receive text alerts about transactions, deposits that come through to your card, alerts when you get close to spending limits and much more.
Not only will you receive texts from NetSpend, but you can also send them texts to:
- check your account balance
- get information about your latest purchases
- find the closest reload center
- get your routing and Card Account information
As we mentioned above, the text alerts can help you keep you from overspending, and you’ll also be able to take advantage of the online budgeting tools on the website. With all of the different tools available, NetSpend can help you manage your money.
Loading your NetSpend Prepaid Card
NetSpend offers various convenient methods to load money onto your card. These include in-person check deposits at grocery or convenience stores, direct deposits, mobile check loads through the NetSpend app, and member-to-member money transfers.
In-Person Check Deposit
You can load money to your card by going to one of the many grocery or convenience stores and loading money. They offer over 130,000 different locations that you can go to. With NetSpend, there are several other ways that you can use that don’t require you to get in your car.
Unlike most prepaid cards, you can set up a direct deposit directly to your NetSpend card. It works just like a regular direct deposit to any other account. It’s a great way to get access to your money quickly.
Mobile Check Load
Maybe you don’t want to sync your card with direct deposit, in that case, you can load your card by snapping a picture of your paper check through the Mobile Check Load feature on the Netspend app.
This is a standard technique used by banks to deposit money, but it’s not as accepted in the prepaid debit card market, nor is having an easy to use mobile app.
Member Money Transfer
If you hold a NetSpend prepaid Mastercard or Visa, you can send money directly to other NetSpend cardholders, making it a great option to send money to your friends or family that are also cardholders.
If you have someone willing to help you out, it’s an easy way to get money onto your card.
One of the biggest pitfalls of prepaid debit cards is the fees that come along with them. NetSpend’s fees are comparable to other prepaid debit cards on the market. Yes, you’ll be paying fees for various things, but they aren’t going to break your bank. There is one fee that you should be aware of if you’re considering applying for a NetSpend card, and that’s the transaction fees. There are two options for how much you’ll pay for every transaction, either up to $2, or you can pay $9.95 every month for an unlimited amount of transactions. In just about every case, doing the one-time monthly fee can save you money every month.
This isn’t the only fee for using NetSpend. Every time that you go to withdraw money from an ATM, you’ll pay $2.50 plus any fees from the ATM owner. If you’re going to load your card with more money, either cash or check, at one of the loading stations, they will charge $3.95 every time. The loading station fee is easy to avoid. Use the app to load your card instead, and you won’t be charged anything.
NetSpend Card Options
There are several different cards Netspend offers that you can choose from, the two most common are the basic card with all of the advantages that I listed above, and the other option is the NetSpend Premier.
With the higher-level card, you’ll get a few additional features that aren’t included in the basic plan. You’ll enjoy lower fees, a “purchase cushion” of $10, which keeps you from overdraft fees should you spend more money than is in your account. You can also get a customized card with your favorite photo.
The qualifications for the premier card are simple, set up a direct deposit and have at least $500 deposited in one month and pay $5 per month to maintain the premier plan, and that’s all. It’s as simple as that. These are the three cards and how their fees work:
Summary of Nestpend Card Plans and Fees
The account inactivity fee can be avoided by having some activity on the account. This can even be as simple as transferring one dollar to NetSpend from your checking account.
NetSpend for Businesses
NetSpend also caters to small businesses and individual business owners, offering advantages such as managing employee spending, simplifying payroll, providing employee bonuses, facilitating tip splitting, and tracking business purchases for tax purposes.
While using a prepaid debit Mastercard for business may not be the most conventional approach, it can be a suitable solution for certain companies.
Using your NetSpend Card as a Savings Account
You can use a NetSpend card to supplement your finances is by using it as a savings account, not as a traditional debit card. You might be surprised to learn that with NetSpend, you can open a savings account and earn up to 5.00% APY.
You can set up money to automatically transfer money into your savings account every time that you put money on your card, or you can make transfers from your NetSpend online account center.
The only downside to the account is they limit your savings to $1,000. So you aren’t going to be able to put a fully-funded emergency fund in there, but putting $1,000 in the account is a way to make 50 dollars each year.
NetSpend Referral Program
One of the interesting advantages of NetSpend versus other prepaid debit cards is their rewards program.
Once you have a Netspend account, you can start referring friends and family members. For every person that signs up because of a referral, both accounts will receive $20 after the new customer deposits $40 onto their card.
Every member receives a referral code that they can give out to anyon that wants to open up an account. As long as the new person uses that code and load the card with $40, everyone gets paid.
If you are looking to make your first $20, use my NetSpend link as your referral.
The Disadvantages of NetSpend
One of the common complaints with NetSpend is customer service. If you look online, you’ll see plenty of gripes that cardholders have with the customer service, which can be a significant turnoff for some people.
Hopefully, you’ll have a different experience, or you’ll never need to contact them for additional help. So far, everything has run smoothly for me.
It reminds me of my FreedomPop review, most people had no problems, but those that did were very frustrated and were very likely to voice that frustration online.
Is Netspend FDIC insured?
Yes, Netspend cards are FDIC insured through their issuing banks – Bancorp Bank, Pathward, N.A., and Republic Bank & Trust Company.
Can I set up direct deposit with Netspend?
Yes, Netspend has the same capabilities for direct deposit as any other bank account.
Can I use a Netspend card like a regular bank account?
Yes, Netspend cards can be used for everyday transactions like paying bills, making purchases, and making cash withdrawals. Remember, that Netspend is a prepaid card and has the limitations of prepaid cards.
What are the cons of a Netspend card?
Some common cons of Netspend cards include associated fees on various transactions, there may be some limitations on account features when compared to a traditional bank account, and some users have reported customer service issues.
Can I close my Netspend account at any time?
Yes, you can close your Netspend account at any time. You will need to contact Netspend customer service to begin the account closure process.
Can I withdraw cash from ATMs using my Netspend card and are there any fees?
Yes, you can withdraw cash at ATMs with your Netspend card as long as they are part of the Netspend network. As with most ATM withdrawals, there are fees which may include a fee from Netspend and the ATM owner. The specific fees can vary, so it’s important to check the Netspend fee schedule or cardholder agreement for detailed information.
Netspend Review Final Thoughts
Honestly, these accounts are geared towards people that can’t open a bank account because of poor banking history, but that doesn’t mean that you can’t take advantage of them as well.