Founded in 1999, Netspend is a leading provider of prepaid debit cards, prepaid debit Mastercard and Visa cards, and commercial prepaid card solutions, with over 10 million customers served in the U.S. NetSpend cards are not a scam. There are number of 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.

NetSpend prepaid MasterCard and Visa cards are popular prepaid 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 Debit 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. (For related reading, see "How Netspend Works and Makes Money")

Understanding NetSpend Cards

Prepaid debit cards, such as NetSpend cards, differ from business credit cards in 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/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.

Another difference between prepaid debit cards and credit cards is that many credit cards offer spending rewards in the form of points, cash back, or airline miles. Most prepaid cards, including the Netspend 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 that 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

When using the cards in stores, if you choose credit at checkout and provide your signature, the transaction fee for the purchase will be $1 and the funds are deducted from the card account. If you choose debit, you must give a personal identification number (PIN) and you are charged a $2 transaction fee. Individual transaction fees can be avoided by subscribing to premium Fee Advantage Plans, which charge monthly service fees ranging from $5 to $9.95 as of 2015. Fees for ATM cash withdrawals range from $2.50 domestically to over $4.95 internationally.

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 to separate 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.