How Do Netspend Cards Work? (2024)

Netspend offers prepaid MasterCard and Visa debit cards requiring no minimum balance and no credit check. All transactions made using Netspend cards are insured by the Federal Deposit Insurance Corporation (FDIC) up to the current coverage limit, and the cards can be used anywhere MasterCard and Visa debit cards are accepted. Cardholders can make in-store purchases, shop over the phone and online, and withdraw cash at ATMs worldwide.

Founded in 1999, Netspend is a leading provider ofprepaid debit cards and commercial prepaid card solutions, with more than10 million customers servedin the U.S. There are several ways you can apply for a Netspend card. Once you receive your card, you can activate it online or via the phone, just like any other debit or credit card.

Key Takeaways

  • Netspend provides prepaid debit cards, prepaid Mastercard and Visa debit cards, and commercial prepaid cards.
  • Prepaid cards are different from credit cards in that you can only spend funds that you preload onto the card.
  • Netspend prepaid cards with Visa or Mastercard logos can be used wherever these forms of payment are accepted.

Understanding Netspend Cards

Prepaid debit cards, such as Netspend cards, differ fromcredit cardsin that you can only spend funds, which you have already preloaded onto the card. In other words, a Netspend card is not a credit card at all but simply a way of making funds that are already in your possession available via credit and debit card electronic payment technology.

Credit cards offer a revolving line of credit, which you can typically pay off over time. In addition, outstanding credit card balances accrue interest, which must also be paid off. With a prepaid card, you're spending your own money, whereas using a credit card is like spending borrowed money, which you are expected to pay back with interest at a later date.

Although different from credit cards, prepaid cards can still be used wherever Visa or Mastercard is accepted if the card has one of these logos.

Another difference between prepaid debit cards and credit cards is that many credit cards offer spending rewards in the form of points,cash back, orairline miles. Most prepaid cards, including theNetspend Small Business Prepaid Mastercard, do not. However, credit card holders typically have to spend a considerable amount on their credit card to really see rewards benefits.

The biggest similarity between prepaid debit cards and credit cards is that they usually have a card network logo on them like Visa or Mastercard. This means the card can be used at any place that accepts either of these methods of payment. However, one major difference is that using a Netspend card does not impact a person's credit score, such as a credit card does.

Getting a Netspend Card

Netspend applications are quick and simple, just requiring your name, address, and email address. All applicants are guaranteed approval once the applicant's identity is proven, and new cards are sent via mail within seven to 10 business days.

How to Use Netspend Cards

Netspend cards can be used just like credit cards or debit cards. You can choose credit at checkout and provide a signature, or you can choose debit and enter a PIN. Each purchase comes with a $1.95 fee regardless of which option you choose. Fees for ATM cash withdrawals are $2.95.

Individual transaction fees can be avoided by subscribing to premium Fee Advantage Plans, which charge $9.95 monthly. This fee can be reduced to $5 by having at least $500 direct deposited to your account each month.

How to Reload Funds

One of the best features of a Netspend card is how easy it is to add funds to the card. Funds can be added to Netspend accounts through direct deposit, bank account transfers, Netspend card account transfers, or through Netspend reload network locations. The only ways to add funds to the account without incurring fees are through direct deposit or through the Netspend online account center.

Four Benefits of Netspend Cards

  1. Separate business and personal expenses: The main reason to get a prepaid business card is it allows you toseparate personal expenses from business expenses. This makes life easier at tax time.
  2. Manage employee (and personal) spending: A prepaid debit card is a perfect tool for managing the spending of other employees, as you can ensure that nobody using it spends more than you want. With the Netspend Small Business Prepaid Mastercard, you can distribute funds to up to 10 sub-accounts. Spending on a Netspend account is also capped at $5,000 each day. Just remember that additional sub-accounts will cost you $1.95 each per month.
  3. Allows for business card use: Running an entirely cash business makes it very difficult to keep track of your money. A prepaid debit card at least allows you to allocate cash for business purposes in an organized way. A prepaid card may also come in handy for business expenses that can’t be paid for in cash.
  4. No credit check: No credit check is required for most prepaid business debit cards. All it takes to receive a Netspend Small Business prepaid card is a short application and an ID.

How Do You Put Money on a Netspend Card?

There are multiple ways to add money to a Netspend card. There is no fee for direct deposits, mobile check uploads, or transfers from a connected bank account. Fees vary for account deposits via Netspend reload locations or Western Union.

How Much Does Netspend Charge You to Use the Card?

Each purchase comes with a $1.95 surcharge whether you use the card as a debit card or a credit card. This fee is waived if you sign up for a $9.95 monthly plan. The fee for the monthly plan is reduced to $5 if you have at least $500 direct deposited to the account each month.

Is Netspend a Real Debit Card?

It's a real debit card in the sense that it can be used just like a debit card. What many people traditionally think of as a debit card is tied to a bank account that must be funded for the debit card to be useful. Netspend cards also must be funded for use.

The Bottom Line

Netspend offers prepaid debit cards with Mastercard or Visa branding. Cards can be funded in ways that are similar to how one might manage an online bank account. However, the fees associated with Netspend, whether it is pay-as-you-go or part of a monthly plan, are far greater than what you can get from a typical online bank.

How Do Netspend Cards Work? (2024)

FAQs

How Do Netspend Cards Work? ›

With a Netspend Prepaid Debit Card, you can make purchases at stores, over the phone and online. Use it anywhere Debit Mastercard and Visa debit cards are accepted. Withdraw cash at ATMs worldwide. Pay bills, rent and other necessities.

How do I spend money on my Netspend card? ›

Netspend cards can be used just like credit cards or debit cards. You can choose credit at checkout and provide a signature, or you can choose debit and enter a PIN. Each purchase comes with a $1.95 fee regardless of which option you choose. Fees for ATM cash withdrawals are $2.95.

Why did I get a Netspend card with no money? ›

Tax Refunds: The Internal Revenue Service (IRS) may send a Netspend card if they do not have your direct deposit information on file. This can happen if you are eligible for a tax refund or if you are receiving Economic Impact Payments during times like the COVID-19 pandemic.

Why would someone get a Netspend card? ›

Netspend allows individuals to receive access to their direct deposit funds two days early, and your money is FDIC-insured via Netspend's relationship with three banks. The company does not charge overdraft fees and allows consumers to open a savings account that pays 5% on balances of less than $1,000.

What is the Netspend controversy? ›

What was the lawsuit about? According to the FTC, many people who bought NetSpend prepaid debit cards were unable to access their funds, either because NetSpend denied or delayed activation of their card or because NetSpend blocked them from using it.

What is the daily limit for Netspend? ›

The Netspend withdrawal limit is $325 per withdrawal and $940 per day from an ATM. In addition, you can withdraw up to $4,999.99 every 24 hours from a teller at banks and credit unions that display the Visa logo in their window.

What's the least amount you can load on a Netspend card? ›

There is no minimum amount of money you're required to put on your NetSpend prepaid card. However, you will need to put at least $10 on the card the first time you load it. Please let us know if you have any other questions!

What is the benefit of a Netspend debit card? ›

The Netspend® Debit AccountBetter Debit
  • Get paid up to 2 days faster. ...
  • Up to 6.00% APY Savings. ...
  • Overdraft protection. ...
  • Payback Rewards. SM4

Is Chime better than Netspend? ›

Both function similarly, but have different features and benefits. One of the biggest things to consider is that Chime has no hidden fees², while Netspend® fees can pile up with monthly charges and more.

Can someone send me money to my Netspend card? ›

You can also receive funds from others with Netspend cards or even ACE Elite, Control, and Purpose cardholders. All you need to send money is to get the other person's name and FlashPay ID.

What happens if you don't use your Netspend card? ›

If there has been no activity on an account for 90 days, Netspend will begin charging a $5.95/month inactivity fee. If you have a monthly plan and are inactive for 90 days, this fee will replace the fee for the monthly plan.

What bank issues Netspend cards? ›

Netspend Visa® and MasterCard® Prepaid Cards are issued by The Bancorp Bank, Pathward®, National Association, and Republic Bank & Trust Company, Members FDIC.

Why is Netspend holding my money? ›

Sometimes, transactions like car rentals, hotel rooms, or pay at the pump require a pre-authorization, which means a hold is placed on some of your funds until they know the final amount owed. Often, the funds are released within about 3 business days, but it can sometimes take a couple of weeks.

Can Netspend be trusted? ›

NetSpend is a legitimate company but their debit card comes with a lot of fees. Read the fine print. Their target customer is someone who doesn't qualify for a regular bank account. You can probably find something better with lower fees.

What are the downsides of using a prepaid card? ›

Disadvantages. Pre-paid debit cards do not help you build credit. Many pre-paid debit cards charge fees before you even start using them. There is usually a monthly fee and fees on common transactions such as ATM withdrawals, card replacement, direct deposit, and reloading the card.

Does Netspend affect credit score? ›

Netspend is a pre-paid debit card that can be replenished regularly and with direct deposit. You can also receive certain government benefits to a Netspend card like Social Securityu payments. Netspend activity is not reported to credit bureaus and will not impact your credit score.

How negative can you go on Netspend? ›

Key Takeaways. Netspend offers prepaid debit card users overdraft protection when their account balance goes under -$10.01. Customers must enroll and have at least one direct deposit of $200 or more every 30 days.

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