According to the Federal Deposit Insurance Corporation (FDIC), 7 million families in America are unbanked, which means they have access to a bank account or a credit union account.
For families that cannot qualify, and even individuals who have trouble managing their finances, prepaid debit cards like Netspend are a godsend.
Prepaid cards’ global market in 2020 was estimated at a whopping $2 trillion. With the rising popularity of such cards, many companies offer this alternative to debit and credit cards.
Netspend is one of the leading names in the prepaid card market, but is the prepaid Netspend card reliable?
Yes, NetSpend is quite reliable and also has similar protection from unauthorized transactions as you would with a traditional credit or debit card through the Zero Liability Protection policy from MasterCard or Visa.
Read on to find out more about it.
Is The Netspend Prepaid Card Safe To Use?
Netspend provides a way out for financially troubled individuals who cannot benefit from a traditional bank account.
One of the prepaid debit market leaders, Netspend caters to more than 10 million customers and is reliable. If the sheer number of their customers is not enough to convince you of their legitimacy, you should know that Netspend cards are FDIC-insured.
You also have similar protection from unauthorized transactions as you would with a traditional credit or debit card through the Zero Liability Protection policy from MasterCard or Visa.
Furthermore, when you open an account with Netspend, they ask for personal information to prove your identity under the USA PATRIOT ACT. This federal law demands every financial institution, along with their third-party service providers, to attain this information for prevention against fraudulent activity.
Many people are reluctant to provide personal information online since cyber security (or lack thereof) is a matter of concern.
However, when providing information to open a Netspend prepaid card account, you can ensure your private information is encrypted and protected through Secure Socket Layer technology.
As an added protective measure for online security, Netspend also offers a virtual account feature. This allows you to use a temporary virtual card number rather than your Prepaid Card account number for online vendors that you do not fully trust.
You are allowed six temporary virtual card numbers for each active card account, which you can cancel post transaction for fraud protection. You can avail of the virtual accounts service by logging into their online account center.
Netspend has been a prepaid debit card provider since 1999, with over 130,000 reload locations, which further cements their authenticity.
Understanding the Netspend Card Fee Structure
Even though with the Netspend card, you can shop at all the places that accept Visa or Mastercard while being underbanked, it is often not the cheapest route to take.
While there is no question about the legitimacy of Netspend prepaid cards, you need to understand their fee structure. Most of the scamming claims against Netspend are usually because people do not expect additional fees.
That said, there are ways to minimize these fees.
You can either use your card to pay-as-you-go or opt for a monthly plan. If you are unsure how much you will be using your card, you should go for the pay-as-you-go plan, as it rids you of any monthly fee. However, you will have to pay up to $2 for every transaction. This works well for those individuals who are not frequent card users.
On the other hand, if you use the card for everything like groceries or to pay bills, you will benefit from avoiding transaction fees. In that case, the monthly plan allows unlimited transactions for a monthly fee of $9.95.
However, beware that the monthly plan only revokes fees for transactions. Any other costs for ATM withdrawals or to load money will still be applicable. Frequent card users can avoid ATM fees by getting cash back at the counter.
You can also upgrade to their premier monthly plan, which offers a reduced fee. However, this is conditional on receiving $500 in government benefit or payroll direct deposits. You cannot upgrade to the reduced monthly plan with a pay-as-you-go plan.
Being informed about the various usage and maintenance fees helps you make a better decision when opting for Netspend.
Why Should You Use Netspend Prepaid Debit Cards?
Netspend cardholders are not the only individuals who cannot qualify. Some people use them alongside a traditional checking account to manage their own money better.
With no activation fee or minimum balance requirement, Netspend proves to be excellent for monthly budgeting; since you can only spend just as much money as you load.
There are various other benefits to owning a Netspend card.
1. No Credit Check
Netspend requires no credit check, and you can get yours with just the submission of a simple form since the card works so that you can only use the loaded funds. Therefore, it has no impact on your credit score.
2. Make Direct Deposit
One of the highlighting features of Netspend is that you can make a direct deposit and get your money two days earlier than the usual paycheck. Moreover, checks can also be uploaded to your account after clicking a few pictures through the app.
3. Use Your Netspend Account Via The Mobile App
The Netspend app makes life easy by allowing you to manage your finances online through your smartphone. You can use the app to receive and transfer money to other Netspend accounts and cash platforms like a PayPal account. Loading your card through the app is also free.
4. Save Money
You can also set up a Netspend savings account to earn up to 5.00% Annual Percentage Yield (APY). You can manually transfer funds from your card account to your savings account or set up an automatic transfer every time you load your card.
Netspend is a reliable prepaid card service provider, and it is entirely safe to provide them with identification information. Any complaints against Netspend usually stem from poor customer service or not understanding their fee structure.
Our advice would be to read up carefully on how the card works and the various charges that come with it, so you know that you are signing up.
While Netspend may not be the cheapest of the options for finance management, its prices are on par with competitors, and it brings some unique advantages to the table. As for security, Netspend is 100% legit.