Credit cards have almost become impossible to live without, but traditional credit cards are not always the best or may not even be an option for some consumers. For those who are unable to get a traditional credit card for reasons such as past credit problems, income level or age, prepaid credit cards are a solution. Two of the more popular prepaid credit cards are issued by NetSpend or GreenDot.
Both NetSpend and GreenDot have similar characteristics in that they are able to be used at any location that accepts MasterCard. Additional features that both cards have is there is no credit bureau check, no minimum balance requirement, no overdraft fees, no bounced checks, no surprises and perhaps most important no credit card debt.
Both companies issue the cards through banks that are FDIC insured, so they are guaranteed against losses, like a checking account. The difference in the two cards is noticeable when it comes to the fees that are associated with the cards.
Fees charged by the cards can add up to substantial amounts, and prior to selecting one card the fees need to be considered.
Monthly service fees are charged by both companies. NetSpend charges $9.95 monthly service fee compared to $5.95 by GreenDot, GreenDot’s monthly fee is waived if at least $1,000 is added to the card within a month or funds are added to the card 30 times within a month. Both cards are able to accept direct deposit from employers who offer direct deposit. Some employers who offer direct deposit will not process to prepaid credit cards. An addition both cards allow money to be transferred from other banking accounts, but fees may apply based on how the funds are transferred. Lost or stolen cards can be replaced. NetSpend charges up to $9.95 dependent on the circumstances, and GreenDot charges $4.95 for a replacement.
Money can be added to the card at participating local retailers, and typically the fee charged is $4.95 for each time money is added to the card. Additional cards are available for up to 3 family members from Netspend with an additional monthly fee, and GreenDot allows one additional card. GreenDot offers a prepaid student card program that does not have a second card fee.
These cards can be used internationally, and as with traditional credit cards there is a surcharge added to each transaction. On an international ATM cash withdrawal NetSpend charges $4.95 per withdrawal in addition to any fees charged by the ATM owner. GreenDot will add a 3% surcharge to any transaction from outside the 50 United States.
Both cards are easy to acquire, but it should be noted that due to Federal laws you will be required to supply certain identification information. This includes name, address, Social Security Number, date of birth and other information. In addition the person who registers the card must be at least 18 years old.
NetSpend does offer a saving account plan as part of their card that has a 5% Annual Percentage Yield (APY). Both companies have been serving customers since 1999. NetSpend is based in Austin Texas, and GreenDot is based near Los Angeles California.