What Netspend Credit Cards Are
Netspend offers prepaid cards and credit cards designed for people who want an alternative to traditional banking or who are rebuilding credit. The Netspend Credit Card is a secured credit card, meaning you put down a cash deposit that becomes your credit limit. You use it like a regular credit card—swipe it at stores, pay the bill each month—and the card issuer reports your payment history to the three major credit bureaus.
The card itself is not a prepaid card where you load money and spend it down. Instead, you borrow money against your deposit, make monthly payments, and build a credit record. This matters because prepaid cards do not report to credit bureaus, so they do not help you build credit history. A secured credit card does.
Netspend is a financial services company that has offered prepaid cards for years and added credit card products more recently. The credit card is issued by a bank partner and carries standard credit card terms: an interest rate, an annual fee, and monthly billing cycles.
Key Takeaways
- Netspend's secured credit card requires a cash deposit that becomes your credit limit, and you make monthly payments like any credit card.
- The card reports to all three credit bureaus, so on-time payments build your credit score over time.
- Annual fees, interest rates, and deposit requirements vary by the specific Netspend card product, so compare the terms before you choose one.
- You can request a credit limit increase or transition to an unsecured card after demonstrating responsible payment history, typically within 6 to 18 months.
- Netspend charges monthly maintenance fees and per-transaction fees on some products, so read the fee schedule carefully.
How the Deposit and Credit Limit Work
When you open a Netspend secured credit card, you deposit cash into an account held by the card issuer. That deposit becomes your credit limit. If you deposit $500, your credit limit is $500. You cannot spend more than that amount, and the bank holds the deposit the entire time you hold the card.
The deposit is yours—it is not a fee. But it is locked up and not available to spend. You access your actual credit through the card itself. Each time you use the card, you are borrowing against that deposit, and you owe the bank money at the end of the billing cycle.
Minimum deposits vary. Some Netspend cards require $250 to $500 as a starting deposit. A few products allow higher deposits if you want a larger credit limit. Check the specific card's terms to see what deposit range applies.
Fees and Interest Rates You Will Pay
Netspend credit cards carry several types of charges. An annual fee ranges from $35 to $99 depending on the card, and it is charged once per year. A monthly maintenance fee may explore—typically $5 to $10—though some cards waive it if you meet certain conditions like making a purchase each month.
Interest rates on Netspend secured cards are higher than rates on traditional credit cards. Expect an annual percentage rate (APR) in the range of 18% to 24%, though the exact rate depends on your creditworthiness at the time you open the account. If you carry a balance, you pay interest on that balance each month.
Additional fees may include late payment fees (usually $25 to $35), over-limit fees if you exceed your credit limit, and foreign transaction fees if you use the card outside the United States. Read the card's fee schedule before you open the account so you know the full cost.
How Netspend Reports to Credit Bureaus
The Netspend credit card reports your account activity to Equifax, Experian, and TransUnion—the three major credit reporting agencies. This means every payment you make (or miss) becomes part of your credit history. On-time payments help your credit score. Late or missed payments hurt it.
The card issuer typically reports once per month, usually around your billing date. It takes time for score changes to show up—usually 30 to 45 days after a payment posts. If you are rebuilding credit, expect your score to improve gradually over 6 to 12 months of on-time payments.
This is why a secured credit card can be useful for credit building: it gives you access to credit while the bank's risk is limited by your deposit. The tradeoff is higher fees and interest rates than you would pay with a traditional card.
Steps to Open a Netspend Credit Card Account
Opening a Netspend credit card involves several steps. First, visit Netspend's website or a retail location where Netspend cards are sold (some are available at Walmart and other retailers). You will need to choose which Netspend credit card product you want—terms differ between products.
Next, you provide personal information: your name, address, date of birth, Social Security number, and employment information. Netspend will run a credit check. Some Netspend cards are available to people with no credit history or poor credit, but the credit check still happens.
If you are approved, you fund the account by making your deposit. Deposits can usually be made by bank transfer, debit card, or check. Once the deposit clears, your card is activated and ready to use. This process typically takes 5 to 10 business days from approval to set up.
Keep your deposit receipt and account information in a safe place. You will need your account number and PIN to manage the account online or by phone.
When to Upgrade to an Unsecured Card or Close the Account
After 6 to 18 months of on-time payments, Netspend may offer to convert your secured card to an unsecured card. An unsecured card does not require a deposit, so your cash is released back to you. Your credit limit may stay the same or increase. The interest rate and fees may also change—sometimes improving, sometimes not.
You can request a conversion if Netspend does not offer one automatically. Contact customer service and ask whether you are may be able to access. Approval depends on your payment history and current credit score.
If you decide to close the account, your deposit is returned to you, usually within 5 to 10 business days. Closing the card does not hurt your credit score when ready, but it does remove an active account from your credit history, which can have a small negative effect over time. If you are still building credit, keeping the card open (even if you do not use it) is often better for your score.
Netspend Credit Card vs. Other Secured Card Options
Netspend is not the only company offering secured credit cards. Capital One, Discover, and several banks offer secured cards with different terms. Comparing them matters because fees and interest rates vary significantly.
Some secured cards charge no annual fee. Others charge $25 to $35. Interest rates range from 18% to 24% across most issuers. Minimum deposits also vary—some start at $200, others at $500 or higher. If you are choosing between Netspend and another secured card, compare the annual fee, APR, minimum deposit, and whether the issuer reports to all three credit bureaus.
Netspend's advantage is availability—the cards are sold in retail locations, not just online. The disadvantage is that Netspend's fees and rates are often higher than competitors'. If you have access to a traditional bank or credit union, a secured card from them may offer better terms.
Frequently Asked Questions
Can I use my Netspend credit card deposit to pay my bill?
No. Your deposit is held separately and is not available to spend. You must make payments from your bank account, by check, or through the Netspend website. The deposit stays locked until you close the account or convert to an unsecured card.
What happens if I miss a payment on my Netspend credit card?
A late payment is reported to the credit bureaus and damages your credit score. You will also be charged a late fee, usually $25 to $35. If you miss a payment by 30 days or more, the card issuer may freeze your account or close it. Contact Netspend when ready if you cannot make a payment.
How long does it take to build credit with a Netspend card?
Credit score improvements depend on your starting point and payment history. If you make on-time payments for 6 months, you should see some improvement. Significant improvement typically takes 12 to 18 months. The longer your positive payment history, the more your score will improve.
Can I increase my credit limit on a Netspend card?
Yes, by increasing your deposit. If you deposit an additional $250, your credit limit increases by $250. You can also request a credit limit increase without adding to your deposit, but approval depends on your payment history and credit score. Some Netspend cards allow limit increases after 6 to 12 months of on-time payments.
What is the difference between a Netspend prepaid card and a Netspend credit card?
A prepaid card is loaded with your own money and does not report to credit bureaus, so it does not build credit. A credit card requires a deposit, lets you borrow money, and reports to credit bureaus. If you want to build credit, you need the credit card product, not the prepaid card.