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? ›

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.

How do you load money on a Netspend card? ›

Choose from several ways to add money to your Netspend card:
  1. Direct Deposit. ...
  2. Netspend Reload Network Locations. ...
  3. Bank Transfers. ...
  4. PayPal®. ...
  5. Transfer Money Between Netspend Card Accounts. ...
  6. Tax Refunds.

Why doesn't my Netspend card work? ›

Here are the most common: Order billing information doesn't match the information on your card account. You don't have enough money in your account to cover the purchase, shipping, and taxes. Your card has been flagged for suspicious activity, has a freeze on the account, or is subject to a security review.

Why would anyone use Netspend? ›

Netspend Cards can be a good option for people who do not have a bank account or who have trouble qualifying for a traditional debit card. They can also be a good way to budget your money since you can only spend what you have loaded onto the card.

How much money can you put on a Netspend card? ›

Load almost anywhere

Netspend has over 130,000 reload locations all over the United States, making the card accessible for almost everyone in the country. The maximum balance for your card is $15,000, and you can load a maximum of $7,500 per day.

How much is the Netspend monthly fee? ›

Summary of fees:
Type of FeePay-As-You-Go PlanMonthly Plan
Plan fee$0$9.95 per mo.
Per purchase$1.95$0
ATM withdrawal$2.95$2.95
Cash reload$3.95*$3.95*
3 more rows

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 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.

How can someone send me money on a Netspend card? ›

You may send or receive funds with others who have Netspend debit cards along with ACE Elite, Control, and Purpose cardholders. 1 To send money, you'll need the other person's name and FlashPay ID. You can also use your own FlashPay ID to receive money from your friends and family.

Why does Netspend need my social security number? ›

Credit reporting bureaus maintain credit reports specifically through Social Security Numbers. If NetSpend never requires cardholders to supply this information, it can't forward any credit bureaus information.

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.

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.

Can Netspend be trusted? ›

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.

Is Netspend a good prepaid card? ›

Netspend's prepaid debit cards are expensive alternatives to a checking account. They're easy to get, and there's no banking history or credit check required to open, but Netspend makes you choose between paying a monthly fee or paying a fee every time you make a purchase.

How does Netspend work? ›

A Netspend card is a prepaid card offered by Netspend and operated by Visa or Mastercard that is not linked to a credit or debit account. A customer orders a prepaid card with a specific amount of money on the card and can use it for a variety of transactions.

Is Netspend a real debit card? ›

Yes, your Netspend Prepaid Card can be used anywhere Debit Mastercard or Visa debit cards are accepted – online, in stores, and over the phone.

Why would I randomly get a Netspend card? ›

A Netspend prepaid card can serve as a bank account alternative for some consumers, including ones who had trouble managing bank accounts in the past, perhaps incurring many overdrafts, says Ted Rossman, senior industry analyst at Bankrate.com.

Can I link my Netspend card to my bank account? ›

Have a bank account in addition to your Netspend Debit Account? Link your financial accounts from participating banks and you can transfer money between them and your Netspend Debit Account.

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