NetSpend Prepaid Debit Card: Popularity Isn’t Everything - NerdWallet
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NetSpend Prepaid Debit Card: Popularity Isn’t Everything

The NetSpend prepaid debit card bills itself as entirely trustworthy: claims that the issuer is “America’s most trusted provider of prepaid card accounts.” Prepaid debit is becoming increasingly popular due to a growing collection of celebrity sponsors and irresistible offers. But didn’t you learn anything in high school? Popularity alone doesn’t get you very far.

I think it’s safe to say that no one likes to be cheated out of their money, so why do consumers keep falling victim to the wicked ways of prepaid cards? Unfortunately, the cards’ popularity is due in large part to their aggressive marketing towards people with a poor credit score. Though many people may be hooked by promises like “no credit checks” and “no overdraft fees,” a prepaid debit card ends up costing more than it’s worth.

One of the most popular cards on the market, the NetSpend prepaid debit card charges some of the most outrageous fees among prepaid cards yet still attracts thousands of customers each year. Here are some facts about NetSpend that will hopefully educate consumers and bring the prepaid fantasy to an end.

NetSpend offers the Pay As You Go card and the Fee Advantage card. Both have a $9.95 activation fee, but vary in terms of monthly and usage fees so consumers can decide which is more “convenient.” Pay As You Go doesn’t have a monthly fee, but charges $1 for every signature transaction and $2 for every PIN transaction. The Fee Advantage doesn’t charge per-transaction fees, but hits you where it hurts with a $9.95 monthly fee. And expect to give much more than you receive from this card. There are plenty of debit rewards cards out there, but the NetSpend Prepaid isn’t one of them.

And the Fee Frenzy Continues

Think you can catch a break by using the Pay As You Go for emergencies only? Don’t forget the inactivity fee, craftily listed as an “account maintenance” fee. If there is no activity on your statement, including purchases or balance inquiries, for 90 days, you’ll find yourself out an extra $5.95 every month you’re inactive. That’s a pretty rough wake-up call just to make sure consumers are still awake and spending.

NetSpend tries to top their competitors by allowing customers to load their card for free through direct deposit or PayPal, but they take their time when processing your deposit—somewhere between 2-4 business days. If you need your money immediately, you’ll need to make a deposit in person at a reload center (fees vary) or by using a NetSpend Reload Pack, setting you back an extra $4.95 for online activation.

An Inconvenient Truth

This card proves to be anything but convenient. If you want to use your card at a grocery store, you need to swipe your card then press cancel when it asks for your pin, and then choose credit, and then hop on one leg, and then bake a cake…Okay, those last couple may not be true, but it feels like there’s always another hoop to jump through with this card.

If you planned to use it at a gas station, expect be short a bit more than the price you paid at the pump for a couple days. NetSpend puts a hold on your card, usually about $75 plus the cost of gas. The only way to avoid this is to pay inside, eliminating any ounce of convenience this card had in the first place. Using it to book a hotel stay places a similar hold (usually the hotel cost +15%) for about 1-2 days.

And if you have a problem with these fees, expect to have a couple more complaints when you call customer service; it’s $4.95 to speak to a human and $0.50 to talk to a machine! But the robot charge may be worth it—according to the not-so-glowing reviews scattered around the Internet, the machine seems to satisfy more customers than their representatives. Though, you may be obligated to speak to a rep if your card is lost or stolen, meaning almost $15 in fees with the $9.95 card replacement fee.

If you’re trying to revive your credit with a prepaid debit card, you’d better rethink your strategy. Prepaid cards don’t do anything for your credit because you’re not borrowing any money. If you want to boost your credit score, look into a credit card for bad credit.



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  • Missy_620

    You must be a banked customer.