What is netspend? | creditcards.com

Most American adults find it difficult to imagine that they do not have a bank account.

It’s how most of us get paid and otherwise go about our daily lives: a quick trip to the grocery store when you realize you’re out of toilet paper; dinner.

Yet for the estimated 63 million unbanked or unbanked adults, navigating an increasingly cashless society without full bank access can make even the most basic tasks difficult, if not impossible.

Prepaid cards offer, in particular to people without bank accounts, many of whom do not trust banks or earn too little money to open an account, an alternative way to manage their money. Netspend is a provider of prepaid debit cards on the Visa and Mastercard networks. Keep reading to find out more about how they work, their pros and cons, and fees to look out for.

What is netspend?

Netspend, founded in 1999, is a financial services company that specializes in rechargeable prepaid debit cards for consumers who do not have access to traditional banking services or who typically rely on “alternative financial services” such as check cashing businesses or high-priced payday loans. Over the past 20+ years, Netspend has grown to over 5 million active accounts.

How does Netspend work?

Netspend prepaid cards function similarly to debit cards, with one significant difference: they are not linked to an existing bank account. Otherwise, you can use the Netspend prepaid card just like any other card: make purchases, pay bills, cash checks, receive deposits and withdraw money from ATMs.

The Netspend card offers some of the same features as a traditional bank card, including account management on the go via a mobile app, customizable text alerts, virtual account numbers to protect against fraud and identity theft, zero liability, and federal deposit insurance through the issuing bank . Netspend cards are issued by The Bancorp Bank, MetaBank and Republic Bank.

Topping up your Netspend balance is easy with a variety of top-up options (more on that below). In addition, Netspend cards are compatible with PayPal and Western Union, allowing you to send money to friends and family, as well as transfer funds between accounts as needed.

Who can apply for a Netspend card?

Netspend does not require a bank account or credit check, so just about anyone can qualify for a Netspend card. You will need to verify your identity by providing your name, date of birth, address and government identification number, such as the one on your passport or social security card, in order to fully use the Netspend card, otherwise you can only do so in – trading operations.

Major cardholders must be at least 18 years of age, but Vermont citizens must not apply as Green Mountain State residents are not eligible to open a Netspend account.

How to register

Applying for a Netspend prepaid card is quick and easy. To get started, fill out the online order form, providing the required information. You will be asked to review the fees associated with the card, the cardholder agreement and Netspend’s privacy policy, and select your direct deposit options.

You will then choose a card design from four options. You can customize your card with an image of your choice, but there is a $4.95 fee.

When you receive your Netspend card (approximately seven to ten business days if you don’t pay for expedited shipping), follow the activation and identity verification instructions that came with it. This includes selecting a PIN for ATM withdrawals and point of sale purchases.

Once Netspend has verified your identity, you can fund your account and start using your card immediately.

How to use the Netspend card

As with all prepaid cards, the purchasing power of your Netspend account is limited to the amount of money available to spend at any given time. You need to top up the card regularly to avoid transaction rejections, especially if Netspend is your main money management tool.

How to replenish and replenish funds

One of the biggest benefits of the Netspend card is getting paid two days faster than a paper check via direct deposit. Unlike conventional banks, Netspend provides payroll funds upon receipt of a payment instruction, rather than depositing the funds upon settlement.

Direct deposits are also not limited to work checks: Social Security income, pension payments, unemployment benefits and tax refunds are also eligible for direct deposit. You can also fund your account with a mobile check or visit one of over 130,000 Netspend recharge locations to deposit cash or paper check.

What is the monthly fee for Netspend?

While you are automatically enrolled in a Netspend pay-as-you-go plan when you first sign up, you can switch to a monthly plan at any time by phone or online billing center. Here’s what each plan entails:

Which plan works best depends on the cardholder, but in general the monthly option is probably the more economical choice if you swipe your Netspend card more than once a week. After that, the $2 purchase fee on the pay-as-you-go plan will exceed the price of the flat-rate plan, which provides unlimited transactions for $9.95 per month.

Unfortunately, none of the plans include all the fees you may face when using the card. You will pay fees for things like mobile check expedited loading (greater than 2 percent or $5 for government and payers checks), over-the-counter withdrawals (greater than 1 percent or $2.95), over-the-counter withdrawals. at Netspend top-up points (2.75 percent or $4, whichever is greater), card replacement ($9.95), and ATM or ACH transaction rejection ($1).

Some fees can be limited or avoided entirely. For example, always use the cheapest reload location you can find. However, it is easy to see how quickly these extra costs can add up, further illustrating the financial challenges for people who are unbanked or underbanked. After all, most people in these groups already have low incomes.

Pros and cons of Netspend cards

While a Netspend prepaid card offers some of the same benefits as a traditional debit card, although not free, potentially high fees based on normal account activity can make it prohibitively expensive. Here are some other pros and cons of using the service:

pros

• No minimum balance requirements
• No late fees, overdraft fees or interest
• Upgrade to Netspend Premier (save almost 50% on monthly payments, earn cashback with Payback Rewards and get a personal card for free)
• Additional savings account with 5% annual interest rate for balances less than $1,000.
• Additional Pharmacy Savings Card (Save up to 50 percent on prescription drugs)
• $20 bonus for inviting a friend

Minuses

• Not a credit product
• $5.95 monthly inactivity fee after 90 days of no transactions, withdrawals or deposits.
• Excessive fees for daily use of the card
• No free access to ATMs
• No airbag for non-PM cardholders

bottom line

If you’re concerned about your privacy or don’t have access to traditional banking services, Netspend Visa or Mastercard could be a money management tool worth considering. And with a little planning ahead, you can minimize those pesky fees to make it a more cost-effective option.

However, if you’d rather not worry about getting a nickel and a dime every time you swipe, look for a bank or credit union that offers second chance accounts, which usually include both a free debit card. as well as free paper checks.