Have you heard about or used Netspend card? It is a Prepaid Card backed by Bancorp bank and Metabank. The most noticeable thing about this card is a huge number of unnecessary fees. In this review I will answer the question whether Netspend is a good prepaid card or not.

What is a Netspend debit card?

Netspend is a reloadable debit card. It was founded in 1999 and serves almost 10 million customer. You can use it to make purchases in stores and online. The card has EMV chip for additional security and contactless payments feature. So you can pay with a tap. Word “Reloadable” means you can reload balance when you spend it.

Is Netspend legit?

Although the card is legitimate, many customers have concerns of how many fees it charges. It has two plans neither of which seem fair to me. First charges $5 monthly fee while the other one charges a fee every time you make a purchase.

Does Netspend check credit score?

The Netspend prepaid card makes no credit score check. Which is great, but why would someone check your credit score if you’re not getting a credit? Often when banks cannot offer any benefit, they claim some industry standard as a benefit. Claiming that card has a chip for security or that it has contactless payment feature.

Why did I get a Netspend debit card in the mail?

When you apply for a Netspend debit card online it sends physical card in mail. It means if you or someone in your household applied to the card it is going to be delivered in mail within 2 weeks. Alternatively, when you buy temporary card in a retail store Netspend sends a permanent card to your doorsteps.

The last possible reason to receive it is when your reloadable card expires. Expires cards usually get replaced automatically so Netspend sends you a replacement.

How to activate Netspend debit card?

The easiest way to activate Netspend debit card is by visiting netspend.com/activate There you have to enter your card number and security code. You can also setup PIN that is often needed to make purchase or to withdraw cash.

How to use Netspend debit card?

After you activate the card you can use it as any other debit card. To track your balance Netspend offers website and a mobile app. But despite being on the market of prepaid cards for a long time it still cannot offer anything but disappointment. You cannot make ACH transfer from other banks and to other banks. Using barcode to deposit cash is not available and you cannot quickly deposit paper checks.

As almost every small bank Netspend offers early direct deposit that can give you money up to 2 days earlier than worst banks like Wells Fargo and Bank Of America. It means if your payday is the 15th of every month, then an early direct deposit gives you money in the afternoon of 14th. At the same time, Bank Of America keeps your paycheck in “processing” state up to the morning of the 16th.

High yield savings

I think the only cool benefit of Netspend prepaid card is its high interest savings account with 5% APY on up to $1,000. It is one of the highest yields for savings accounts today. In comparison most of the high yield accounts pay 2% or 3% at most. For example, Chime bank pays 2% and SoFi has 3.75% APY.

Only two plans and numerous fees

Netspend Prepaid Card fees concern me the most. You have to choose between a Monthly plan and Pay-As-You-Go plan. Neither of these options is good.

The monthly plan charges you $5 per month if you receive a $500 direct deposit per month. Otherwise the monthly fee is $9.95. There is no way to completely avoid this fee. The only benefit of a monthly plan is that you don’t have to pay a fee per purchase.

Pay-As-You-Go plan charges you no monthly fee, but every purchase will cost you $1.5. It means your latte gets very expensive. The maximum you can spend per day is $4,999.

Using a Netspend card at an ATM is pure disappointment. ATM withdrawal has a flat $2.95 fee, which is insane. Given the fact that the majority of prepaid cards now have a network of no-fee ATMs like Allpoint or MoneyPass. Withdrawal via ATM is limited to $325 per withdrawal and $940 per day.

How to add money to a Netspend card account?

You can deposit paper check using Mobile Check Load feature. It is more commonly called mobile check deposit and actually outsourced to Ingo Money. While majority of banks clear check within a day or two Ingo takes up to 10 days. My personal experience shows, that Ingo often rejects checks automatically. You can read more about check deposit Netspend.

I already mentioned early direct deposit. You can download direct deposit form from Netspend app and provide to your employer. Just open your Netspend app. Then select “Move Money” at the bottom and then tap on “Direct Deposit Info”. There you can fill the form.

Alternative is to setup direct deposit by yourself. If employer allows, you can use routing number and account number to set it up manually.

You can also load money through a large network of “Cash reload at the Register”. Such a deposit can cost you $3.95. In contrast, other debit cards often offer free cash deposits at Walgreens, CVS, and Walmart, Netspend prepaid card has no such a benefit.

You cannot ACH transfer funds to Netspend using its mobile app or a website. For this you should link Netspend using account number and routing number in your external bank and push/pull money from there. Here is how you can find these numbers.

Other benefits

One of the popular benefits offered by prepaid cards is overdraft. Banks like Chime and Varo offer up to $200 overdraft. In contrast, Netspend prepaid cards have no overdraft at all.

Knowing all these concerns you may ask yourself. Who could possibly use the Netspend card? Having so many superior competitors like Chime, Varo, Amex Bluebird, Green Dot must bump Netspend out of business by now. In contrast, Netspend has more than 10 million users in the US.

Netspend often partners with tax firms, that issue customers prepaid cards to access their tax returns and tax refunds. Employers often use Netspend cards as a way to pay salaries to employees who don’t have a bank account.

You can get a Netspend prepaid card at Walmart, Office Depot, Walgreens, 7-Eleven, CVS Pharmacy for up to $4.45. If it is too expensive and you can wait, then you can order the card online.

Bottom line

I would recommend using Netspend Pay-As-You-Go plan to earn 5% interest on your savings up to $1,000.