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Updated August 23, 2021 Reviewed by Reviewed by Ebony HowardEbony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries.
Founded in 1999, Netspend is a prepaid debit card provider with over 68 million personal and small business customers. Using one of these cards can be safer and more convenient than carrying cash, but it still allows a cardholder to make in-person and online purchases. And since Netspend is a prepaid debit card program, it doesn't require a credit check nor report your account activity to credit bureaus.
Cardholders may use their pre-funded Netspend Visa Prepaid Card or Netspend Prepaid Mastercard for purchases and payments as they would a debit card. The difference is that debit cards are often backed by a line of credit or overdraft protection, and those are considered forms of credit that can be reported to credit agencies.
Using Netspend cards won't do anything to build or hurt cardholders' credit because it doesn't extend any credit to them. Cardholders are responsible for loading their own money into their accounts before they use their cards—otherwise, they'll be declined.
The company does offer a Netspend Premier card for those who want to enroll in their Direct Deposit program. That means users' payroll or government payments go directly into their NetSpend accounts each month.
The company offers a "purchase cushion" of up to $10 with its Netspend Premier card. However, it's still not considered a line of credit. The company is just allowing users' accounts to have a negative balance of up to $10 in the event; they don't have enough to cover a purchase or payment. Any money they deposit afterward will go toward paying back that amount first.
The company only requires a name, address, and email address to enroll on its website to comply with the U.S. PATRIOT Act. Then, you create a username, password, and security question. Once you complete these two steps, you receive a card in seven to 10 business days. You can begin to fund the account at any time.
Both credit cards and traditional debit card accounts require applicants to provide a Social Security Number and birth date. Companies that offer these types of accounts run credit checks before approval, which often determines the amount of credit they can provide. They can report this information to credit bureaus whether they approve the account or not.
Credit reporting bureaus maintain credit reports specifically through Social Security Numbers. If NetSpend never requires cardholders to supply this information, it can't forward any credit bureaus information.
Since the cardholder's own funds prepay NetSpend accounts, a reportable offense would be rare. The company could contact a collections agency if you use the "purchase cushion" of up to $10 with its NetSpend Premier card and don't pay it back.
Netspend cards can be purchased at local retailers or large chains such as 7-Eleven, Walgreens, and Dollar General. The card allows consumers two options—a MasterCard or a Visa prepaid card. Users load them up using direct deposit from their paychecks, tax refunds, Social Security, pensions, and other benefits. Cards can also be loaded at more than 130,000 locations across the United States.