NetSpend challenges the throne

Is NetSpend a better option for 5X everywhere? 

Update: Shortly after writing this post, NetSpend cancelled my account without warning or explanation.  For details, see “We’re sorry, there is a problem with your account.”

Seven weeks ago I declared the American Express Prepaid card to be the “One card to rule them all.”  In that post, I described how one could earn 5X everywhere by using a Chase Ink card to buy Vanilla Reload cards at Office Depot.  Those Vanilla Reload cards could then be used to load up money on the American Express Prepaid card.  The points come from having used your Chase Ink card at Office Depot: the Chase Ink cards automatically earn 5 points per dollar at office supply stores.

American Express Prepaid Card Recap

In addition to the huge benefit of being able to load from Vanilla Reload cards, the American Express Prepaid card has some great features:

  • Order online for free.  There is no cost to obtaining the card and no credit check is performed.
  • ATM withdrawals are allowed.  The first ATM withdrawal each month is free, then it is $2 per withdrawal after that.
  • No fees (other than ATM withdrawals, as described above)
  • Purchase protection
  • Roadside assistance

Overall, it’s almost too good to be true.  However, there are some annoying limitations:

  • No more than $1000 can be loaded to the card per day.
  • No more than $2500 can be loaded to the card in any 28 day period.
  • The card cannot be used as a debit card.
  • It is an American Express card, so it is not accepted everywhere.
  • It can be difficult to use at Walmart (see “How to shut down Walmart with one swipe”)


Enter Netspend

imageLike the American Express prepaid card, NetSpend prepaid cards can be ordered for free and can be loaded with Vanilla reload cards.  That’s where the similarities end.  Let’s look at the pros and cons:


  • Free money!  If you use this referral link to order a card (, you and the referrer (not me) will earn $20 when you load at least $40 to the card.  Once you have a card, you can get your own referral link to give to family and friends so that you and they can make even more money.
  • Mastercard.  Unlike American Express, Mastercard is accepted almost everywhere.
  • Debit card.  Some transactions require debit cards, and the NetSpend card can be used in those circumstances.  Also, in some cases, using a debit card can save you money.  For example, if you were to use a debit card to pay taxes, you would be charged a very low fixed fee (less than $4) whereas you would be charged 1.89% (or higher) if you were to use a credit card.  Unless you were to make a very small tax payment, the % fee would be much higher than the debit fee.
  • Fewer restrictions.  You can load up to $7,500.00 over any 24‐hour period and up to $15,000 total.  You can make up to $940 in ATM withdrawals per 24-hour period.  More information can be found in their Terms & Conditions here.
  • Payback rewards.  There is a possibility to earn cash back for some transactions.  NetSpend supposedly monitors your spending patterns and offers deals accordingly.  I’ve only been using my card for about a week so I haven’t been offered any deals yet, but I’ll watch this one closely to see what happens.

If you thought the above pros were too good to be true, you’re right.  There are a couple of serious drawbacks:

  • High fees.  $1 per credit transaction, $2 per debit transaction, $2.50 per ATM withdrawal, $1 per bill pay, 3.5% foreign transaction fee.  Credit and debit transaction fees will be waved if you signup for their monthly FeeAdvantage plan ($10 per month, or $5 per month with direct deposit).
  • Account closings.  Quite a few people have reported using the NetSpend card’s debit feature to quickly cash out after loading up the card.  Everyone I’ve heard from who has done this has had their account closed.



The NetSpend card has a few great advantages over the American Express prepaid card, but it’s fees are pretty steep.  The question to consider is whether the advantages of this card outweigh the fees.

It’s theoretically possible to minimize NetSpend fees by making few, very large transactions.  That way, the fees would be a small percentage of each transaction and may be worth the expense.  Unfortunately, evidence suggests that people who do this get their accounts shut down pretty quickly. I don’t recommend this approach.

For those with light spending patterns, this card is unlikely to be a good fit due to it’s high fees.  If this is you, stick with the American Express prepaid cards.

My working hypothesis is that the NetSpend card will be best for those that pay the monthly fee (to avoid per-use fees) and use the card heavily for regular transactions.  At $10 per month, you would have to run at least $1000 per month through the card to keep the fees down to 1% or less.  My guess is that if you establish a pattern of using the card for regular purposes, you will then be less likely to get shut down when you use the card to pay large bills, pay taxes, or do other things that may be construed as “cashing out”.  This is the path I’ve started down, and I’ll do my best to keep you informed as this experiment progresses.  I’m looking forward to using the card to pay estimated taxes, so I’m hoping this works!  Keep in mind, that the above is just my current best guess.  Your mileage may vary.


If you haven’t already read my post “One card to rule them all,” I recommend doing so to get a general understanding of the approach to earning 5X everywhere.  To make the most of this approach, here are some specific steps to consider:

  • Ink Bold: Consider signing up for the Ink Bold, Ink Classic, or Ink Cash.  Each of these cards offer 5X for office supply purchases and thus are really key to getting the most out of this overall approach.  See “How to sign up for the Ink Bold” for details of how to apply and whether you are likely to qualify.  Other cards that might make sense include the American Express Simply Cash Business card (5% cash-back for office supply purchases) or the CitiBusiness AAdvantage World Mastercard (2X for office supply purchases).
  • Vanilla Reload:  Another key to success here is the ability to buy Vanilla Reload cards at Office Depot using your credit card.  Some Office Depot stores have stopped selling the cards and some others have posted signs saying “cash or debit only” for buying prepaid cards.  Fortunately, most stores still allow these purchases.  Many readers have reported ongoing success in the comments of the post “When thieves steal our points”.
  • Reloadable Prepaid card: You will need one or more prepaid cards that can be loaded using Vanilla Reload cards:
    • American Express Prepaid:  Consider signing up for the American Express prepaid card.  Since it has no fees except for ATM withdrawals, it’s a great option for most people.  This will be my go-to card overseas (for any place that accepts Amex) since it has no foreign transaction fees.  See “American Express loves to give us money, part 2” for an opportunity to get $25 free from American Express.
    • NetSpend:  With its high fees, this card is definitely not for everyone, but with the $20 sign-up bonus, there is little risk in giving this card a shot.  Worst case, you can get your $20 bonus and then cash out entirely at an ATM to make a small profit after the fees.  In my case, I decided to pay the $10 monthly fee (for a month or two) to see how well this card works as my primary card.  I won’t use it overseas (due to the 3.5% foreign transaction fees), but I will use it for all of my day to day spend within the U.S.



In the next month or so, I hope to test out all of the following:

  • Paying Taxes: The possibility of earning 5X while paying taxes is too good to pass up.
  • Paying Bills / Mortgage: NetSpend has a bill pay feature in which it appears that they’ll charge a fee of just $1 to send a check.  I’m looking forward to trying this for bills in which I can’t currently use a credit card.  I’ll stick to payments of $100 or more so as to keep my costs down to 1% or less.
  • Direct Deposit via PayPal: I’d like to get the $10 monthly fee lowered to $5.  This supposedly happens when you make a direct deposit of more than $500.  I’m curious to see whether a Paypal transfer will qualify.
  • Other Cards: In addition to the Amex Prepaid and NetSpend cards, there is a Mio card and a soon to be released Vanilla card that can be loaded via Vanilla Reload cards.  I hope to test out these options to see if they offer any advantages over the two I already have.  I also hope to take a look at a competing reload card called Reloadit, but I have yet to find one in a local store.


Reader experiences

Have you already tried the NetSpend or Mio cards?  Have you tried Reloadit cards, or any similar product?  Please let us know about your experiences.  What has worked, and what hasn’t?  Comment below.

Follow me on Twitter / Like me on Facebook / Find me on Google+

If you are new to collecting miles, click here for the free newsletter
If you are new to Frequent Miler, start here



  1. Is there a difference between the Visa and MC variant of the card? I need Visa for specific reasons, but I also want to provide a referral to you. However, the referral link is only for MC.

  2. Strange question I am sure BUT can I load 10K on this card and then have them send an e check for tuition to my son’s school? 27 pages of T & C was a bit much to read

  3. Does anyone know the monthly limit on the Paypower card? I know it’s $15k on netspend but not couldn’t find anything on Paypower anywhere.

  4. FYI to all playing with Netspend – if (when?) they cancel your account, it can take weeks to get your funds back. Mine took 5 weeks and that was after threats of legal action.

    Your experience may differ but be fiscally prepared for a wait.

    • Goosfish: These aren’t gift cards, but they are on the gift card rack. You need to buy things called “Vanilla Reload” cards. Instructions for how to load them money from them to the Netspend card or to others (such as the Amex prepaid) are on the Vanilla Reload card package. Please see my post “One card to rule them all” for more information.

  5. Just an FYI:

    I tried purchasing family travel on netspend today

    (purchased $5k in vanilla reload from office depot using chase ink to earn 25k points )

    The cost of the trip was around $5500. I found out that Netspend does not allow you to charge more than $4999 in any 24 hour period.

    I have sent them a secure message asking if they can release the hold temporarily…hopefully they agree to let me pay for my vacation with the netspend card!

    • mp: Let us know how it goes. Will your travel provider allow you to split the purchase between two cards? Also note that NetSpend often shuts down big spenders so while you can probably use the card for this one big purchase (at least $4999 of it), you may have your account shut down after that.

  6. My strategy was to go slow and steady with NETSPEND.
    Space out $500 loads and ACH to pay my AMEX or utilities every 7 days. I started late August, and just last week I got axed.
    I was able to cycle $3k in three billing cycles (AUG, SPET, OCT. Minimal! I was hoping to at least do 10k.
    I refuse to use the card for high fees.
    At least I got the $20 referral bonus.
    I think that what triggered the AX was the referral conga on FT.
    I think the best strategy is to load it with a lot of cash, almost to the limit and then close it or get closed and get a check. This is if you can afford to have a large sum of $ in limbo for “up to 20 days”
    Anyways, move on to next idea.
    PS- Great to hear you and meet you yesterday!

  7. Netspend is the best!!! I was able to unload a total of 7k in a week span, and it only cost me $7.50. Actually I am ahead by $12.50 because of the $20 referal bonus!!!
    Thanks guys for all the great info on this blog.

  8. Bluebird can’t compete with Netspend to convert credit to UR points with my “Special, Secret Method”. I love vanillas!!!

  9. Netspend is not as bad as everyone says it is.One has to know how to correctly use Netspend to maximize its potential.One has to know the “Special, Secret Method” to unlock Netspend full potential.I will see how much I can get away with my method before Netspend shuts me down:(

  10. Just an update on my post on purchasing travel using netspend. Netspend did not release the hold. You can only spend $4999 per day on netspend. However, I was able to use the netspend card for 4999 and anther card for the rest. A couple of weeks before that I used netspend to make a $2500 tax payment . Needless to say, I or shut down. However I spent almost $7500 using netspend only twice plus there was an additional $1000 on the card that I should be getting back in a couple of weeks. I got $8500 in “spend” out of it. I think with netspend we are going to get shut down anyway, so why not jump in with huge immediate spends, let them return the rest and walk out knowing you got the maximum bang for your buck. It seems slow spending costs more and still yields cancellation- for some, before they even hit a $5k spend.

  11. can I buy netspend reload packs with credit card to earn miles then load it onto the netspend prepaid debit card and use bill pay to pay mortgage?

    • leslie: it depends on the store. Some stores will let you buy Vanilla Reload cards (Netspend reload packs) with a credit card. Some Walgreens stores allow it and most Office Depot stores do.

  12. I just want to add one last thing…when I unloaded the 7K from Netspend, I did not buy a single thing!!! I Love Vanillas :)

  13. And finally, I have two Netspend cards with the same name, and I just received an additional one with my wife’s name. So that’s $60 profit already in referals. Then I will the three cards to refer each other to earn additional referals. Go to love Vanillas :)

  14. Netspend is the best…I have converted 10K of vanillas to cash in 1 week span!!! And it did not cost me anything, rather I am still ahead $10 from the referral fee($20-$10 total Netspend fees=$10)!!! I am so in love with Vanillas:)

  15. Yes FM, I am having so much fun with Netspend!!! It is not as bad as everybody says it is. All you have to do is use it correctly to tap into its potential…Forget about paying bills with this, it is too long. Like Mp says, go in big and see how much you can get away with.For the short run, Netspend is the king of all pp!!! Kicks Bluebird ass in the short run.

  16. However, unlike Mp, I do not leave a balance on Netspend. I very quickly convert the Vanillas to cash (about 15M time span). If I get shut down, I do not have to wait at least 20 days to get my money back. I Love Vanillas :)

  17. …and if Netspend shuts you down, all you have to do is order another card(with another $20 referal bonus, thanks to HikerT’s discovery). I Love Vanillas :)

  18. Can someone help me understand. So I was able to by greendot prepaid card and green dot reload with credit card from chase(airtran) Got 5 hundred loaded on prepaid and 500 on reload. I have mortgage of 986 to pay. What should I do now? Also I bought vanilla reload with amex business gold. Does anyone know if it will be coded as purchase or not? I will wait for my blue bird card so I can load online. Cuz I got almost 3000 in prop tax to pay.thanks

    • leslie: I’m encouraged to hear that you found a place that allowed you to buy greendot with a credit card (that’s rare), but I don’t have enough experience with those products to advise you on how to use them. One possible option: I think you may be able to load the greendot money to a PayPal account and then you could transfer that money to your bank or to BlueBird to help with paying your property tax. Yes, I believe that your vanilla reload purchase will be coded as a purchase.

  19. I picked up a Netspend Visa today and I noticed it is issued by Bancorp, not MetaBank. I’m not sure it matters in terms of shutdown triggers but thought it was interesting.

  20. @melovesvanillas- Have you had a success activating a second card after you got shut down? If so, please share. I tried and it wouldn’t let me activate the second card I ordered (shipped to a different address)

  21. Yes my very first stop, I was able to purchase it and got the prepaid card and the reload at no cost. But I just found out that it is admin. by synova bank something like that , it has no bill pay feature. However, by Nov 2nd, it will be admin. by greendot. Then it will have bill pay feature. They are willing to transfer my money over to the new card so I can use bill pay feature.But they say my new card won’t come till nov 9. And my bill is due Nov 15. I have 6 days. that is too close to send payment.

  22. Stevedealin, my second card is still with my parent’s house…I have not actually activated the second card yet.

  23. MeLovesVanilla so the strategy is:

    1) Check that card isn’t shutdown yet
    2) Load big and spend immediately (even within minutes)

    Wait and then repeat steps 1 and 2?

  24. If I get shut down, I will either activate my wife’s card or get my second card from my parents. And to add about getting multiple cards with the same name, my secong WF PP was shipped today. I love this PP industry!!!

  25. They also shut down my second card and my wife’s card…I am so bum :( Now I have to depend on my other PPs to covert the vanillas to cash.

    • MeLovesVanilla- i dont know if you are trolling this discussion or what but in the off chance you are legit in what you have been doing…what did you expect would happen? Look at the volume you were pumping through it versus everyone else who was shut down for much less. It seems no one has any discretion here to make things last.

  26. Mick, I knew I was going to be shut down…it was only a matter of when. However, some small part of me thought I would get away with what I was doing.

  27. I just ordered another card in my wife name’s which I sent to be shipped to my parents house…so far so good…I was able to set up her account online…I am going to try to activate it when I get it. Wish me luck all :)

  28. Mick, if you want something to last, stick with Bluebird, not Netspend. Bluebird is way better than Netspend in the long run: no high fees to use the card, unlike Netspend, which charges poor souls outrages fees. I went in with Netspend with the goal of abusing it instead of Netspend abusing me. I hope that explains what I did with Netspend.

  29. with the 40K, I was able to meet a couple of minumum spend on some cards, which helped me earned some big sign on bunus…and I did not give any money to Netspend because of the $20 referral bonus they gave to me. So they paid me to abuse their card, which I used to my advantage :)

  30. Is it possible to load up Netspend and then have them send a check to someone for the amount? Will this get shut down quickly?

  31. Hi, Ive had a netspend account for over 4 years now. Ive recently been employed and they required direct deposit which i provided my employer with the netspend direct deposit info. I came home to read about horrible reviews on payroll direct deposits.

    Please can anyone give me some insight on the pros and cons of direct deposit through netspend is.

    Thank you so much.

  32. Janice: The advantage of doing direct deposit with NetSpend is that they then charge lower monthly fees. I don’t think there is any particular downside other than NetSpend is a difficult company to work with and there are other, better products with lower or no fees. In particular, I’d recommend that you take a look at bluebird (

  33. I’m wondering what amounts are considered “large”and might get a person shut down with Netspend. Is a $2000/mortgage too much? It’s the only thing i want to use the netspend for? Thanks!

  34. The problem with Blue Bird is that it’s an AMEX and the only store I can buy vanilla reloads at doesn’t take AMEX. It’s dollar general and the vanilla reloads are a little different there. You load your prepaid card at the checkout counter as you purchase. I tried it with my bb, but no luck. We figured it was because they don’t take amex. So, any idea what prepaid card would be second best. I’m just looking to meet minimum spends right now, and not so much maximizing points! Thanks so much! :)

  35. Toni Perkins:
    That’s correct that Dollar General stores (and Family Dollar) have different Vanilla Reload cards in which you have to load at the register. I’d recommend trying either the MyVanilla or Mio cards since those are less likely to get shut down. Unfortunately, your Dollar General store might not allow credit cards for buying Vanilla Reloads. I haven’t had any success at Dollar General or Family Dollar.

Leave a Reply

Your email address will not be published. Required fields are marked *