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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. Either way, you might spend more in fees in a year than you could earn in interest from your card's savings account. There's a convenient nationwide network of more than 130,000 locations for cash reloads, but it isn’t free and there’s no free access to ATMs.
People who want a payment card that doesn’t let you go negative or charge overdraft fees, unless you opt into overdraft coverage.
People who have had trouble with managing a bank account in the past.
» See more options: Check our list of best prepaid debit cards
Netspend Card Pros
5.00% APY savings account on balances of up to $1,000, and 0.50% APY on the amount over that.
Easy access to adding and withdrawing cash within a network of retailers.
You can get your paycheck up to two days early with direct deposit.
Overdraft grace period or courtesy cushion available with optional overdraft coverage.
» Looking for a way to build credit instead? Learn about secured credit cards
Netspend Card Cons
Steep monthly fee for basic fee plan and no way to waive the fee completely.
No free network for cash reloads or withdrawals.
Inactivity fee if you stop using the card, among other fees that many prepaid cards don’t have.
Optional overdraft service costs $20 per overdraft, up to five times per month.
» Ready to open a traditional savings option instead? See the best high-yield savings accounts
General information about prepaid debit cards
What is a prepaid debit card?
A prepaid debit card is a type of payment card that only lets you spend the money you load onto the card. They don’t help you build credit. Like a debit card, a prepaid card works at any merchant that accepts its payment network, such as Visa, Mastercard or American Express. It’s safer and more convenient than using cash. Usually the prepaid card has a mobile app to deposit checks and transfer money. Learn more on our guide to prepaid debit cards.
Unlike checking accounts, prepaid debit cards may lack some services such as free ATM or branch networks, checks, among others. If that doesn’t work for you, see our list of best checking accounts. Or, if you’ve struggled with banks before, check out second chance checking options.
Prepaid debit card vs. debit card vs. credit card
Prepaid debit cards — pay before: You load money onto the card via cash, checks, direct deposit or a bank account before paying for transactions.
Debit cards — pay now: You use money directly from a checking account when paying for purchases or withdrawing money from an ATM.
Credit cards — pay later: You borrow money from a bank when you use the card and pay the money back later.
How does FDIC insurance on prepaid cards work?
Prepaid debit cards nearly always have FDIC insurance, which keeps your funds protected in case the issuer goes bankrupt. Only financial institutions can have FDIC insurance, so a prepaid card is either managed by a bank or by a prepaid card company that partners with a bank to offer that insurance. You must register your prepaid debit card with your name and other identification information in order to be eligible for FDIC insurance and other protections.