Everything about NetSpend cards

netspend cards

With a checking account, you get a debit card to spend your money almost anywhere you want. But a lot of people can’t qualify for bank checking accounts, and in a world where card transactions are more common, that’s a problem. That’s why prepaid debit cards like NetSpend are a billion dollar business, with more card options appearing each year. We’ll go over some of the benefits that NetSpend cards offer, along with the fees and headaches. If you’re interested in learning more about good spending habits and long-term goals, check out a financial advisor may be a good next step.

What are NetSpend Cards?

NetSpend is not the new kid on the prepaid card block. The company started in 1999 and serves more than 10 million “underbanked” customers. Most of the time, these are people who do not qualify for chequing or savings accounts. But that also includes people who prefer cash-only transactions and who are deliberately moving away from the big banks. Some business owners may use prepaid cards to separate business expenses from their personal accounts.

NetSpend cards come with Visa 0r Mastercard imprints and you can use them as credit or debit cards for everyday spending and online shopping. Like cards from major banks, NetSpend cards are FDIC-assured and come with layers of encryption to protect transactions and personal information.

The difference is that users load money into a NetSpend card’s balance before they start using it. Since there is no account to draw from, the card reserves are as important as the money you put on the card.

It is easy to acquire a NetSpend card: you do not need a bank account, there is no credit check and anyone with valid ID can apply. But you are paying for the privilege of using it. NetSpend makes its money from user fees, and there are plenty of them. You pay to load money onto the card, for ATM transactions and withdrawals. If your card is inactive for more than 90 days, you will pay to reactivate it.

Born TSpend Cards: The Pros

netspend cards

netspend cards

There is a lot of competition in the prepaid debit card space. If you’re comparing your purchases – and you should – here are some of the benefits of the NetSpend card:

  • Lots of places and ways to recharge. NetSpend has 130,000 locations across the country where you can top up your card for free. It is also free to top up via electronic direct deposit. Bank transfers are another option, but you will pay a fee for these transactions.

  • A variety of account options. You’ll pay to use a NetSpend card, but you have a choice about how you spend. If you are a regular user, you can opt for a Premier card with unlimited transactions for a monthly fee. Otherwise, you can pay for each transaction and ATM withdrawall. The Premier package also offers an option for small business purchases.

  • Low threshold to qualify and maintain an account. Since there is no background check, you only need to be at least 18 years old to be eligible. There is also no minimum balance required.

  • NetSpend transfers are free. There is no charge if you need to send money to a NetSpend holder or another of your NetSpend accounts.

  • Reward offers. Like some credit cards, NetSpend has some. user benefits, such as cash back on purchases and a friend referral bonus. In addition, you can earn interest on savings accounts: up to 5% annual percentage return (APY) on balances of $ 1,000 or less. If you go over $ 1,000, however, the APY drops dramatically.

NetSpend Cards: The Cons

Critics of NetSpend point out several drawbacks, especially compared to traditional checking accounts. Basically it comes down to the number of fees. For some, NetSpend takes too many small bites of an account balance to be worth it. Here are the main pain points:

  • You will pay to charge. Some charging locations may not charge a fee, but those that do can charge up to $ 3.95 to top up your card.

  • Pay to withdraw. Each ATM and credit union withdrawal costs $ 2.50.

  • And pay to use. Consider how many times you could use a debit card in a month. Now imagine paying $ 1 for every purchase. It can add up quickly, especially if you don’t have a large account balance. Premier accounts charge up to $ 9.95 for the # 0 transaction fee option. .

  • Paying bills online will cost you too. You can pay your bills online with your NetSpend card, but a third party called MoneyGram performs the transaction. And yes, that also requires a fee.

  • Pay not to use. There is a $ 5.95 fee if you do not use your NetSpend card for 90 days.

  • Pay to cancel. You can cancel at any time and receive a check for your balance, less a service charge of $ 5.95.

Is a NetSpend card right for you?

Before signing up for a NetSpend prepaid card, here are the main things to consider:

  1. Do you have access to a bank? Traditional branches and online banks are also hungry for your business. While there is no obstacle to opening a standard checking account, you should know that you will be able to use a debit card virtually free of charge.

  2. Are the fees worth it? There is no way around NetSpend’s charges. Either way, you can expect to pay a minimum of $ 9.95 and potentially a lot more for its convenience.

  3. Is there a better prepaid card option? You are definitely not limited to NetSpend if you are convinced a prepaid card is your best option. Taking the time to evaluate other options can help you determine which one is best for you and your spending habits.

At the end of the line

netspend cards

netspend cards

If you don’t have access to a bank or credit union, prepaid cards like NetSpend can be a welcome alternative. NetSpend is an established company with many regulations and transactional protections banks use. You can use the card almost anywhere and even enjoy some benefits. For most people, the potential deal breaker is the number of fees. If you need a cheaper option for your daily expenses, you should consider other prepaid card companies.

Banking advice

  • Traditional savings and checking accounts also come with a variety of options and requirements. Even if you don’t want to explore prepaid cards, take the time to compare what different banks in your area are offering in terms of fees, account balance requirements, and rewards.

  • Personal finances are much easier if you’ve consulted a professional who understands your needs and goals. Finding the right financial advisor to meet your needs doesn’t have to be difficult. The free SmartAsset tool connects you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you reach your financial goals, start now.

Photo credit: © iStock.com / Viktoriia Hnatiuk, © iStock.com / Sushiman, © iStock.com / PeopleImages

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