Comparing the Value of NetSpend Cards to the Varo Bank Account

by
Adam Rust

Before you get a NetSpend card, you should consider your alternatives, as you can undoubtedly find a better option.

I will compare the NetSpend prepaid debit card with the Varo Money bank account.

In my opinion, both alternatives present a much better value to a consumer.

Before I go any further, let me advise you that it makes a difference. For people who use one of these accounts as their primary banking tool, choosing the wrong (NetSpend) card could cost as much as $60 per year!

Measuring by the total number of accounts, NetSpend is one of the two largest providers of prepaid debit cards. They market their cards through relationships with several check cashing stores. You can find them in other retail settings as well. By purchasing valuable rack space, they can put their product in front of many potential customers. You will enjoy the convenience, but you will pay for it in the form of higher fees.

To save money, you will have to get a Varo Money or an Empower card digitally. You will not find these cards in stores.

NetSpend has two plans. The first, known as the “pay-as-you-go plan,” has no monthly fee. You can load money by direct deposit or by a cash load. Most people will add funds via a load, as those who use direct deposit can avail themselves of a discounted price on their monthly plan option.

Under pay-as-you-go, you’ll pay a fee just about every time you use your account:

• $2 per purchase

• $2.50 to withdraw funds from an ATM – not including any host ATM fees that might also be added.

• $3.95 to load cash

• $0.50 to check your balance at an ATM

• $5.95 if your account has no activity for 90 days.

NetSpend also offers a monthly plan. It costs $9.95 per month, but the price drops to $5.00 when more than $500 is deposited to the account by a direct deposit. NetSpend wants you to establish a direct deposit. Direct depositors are the best customers, as they tend to keep their account open for a long time and generate lots of fees for NetSpend when they buy things with their card. Nonetheless, NetSpend’s monthly plan still has several fees:

• $9.95/$5.00 monthly fee

• No charge for purchases. The lack of a per-purchase fee is the primary virtue of the monthly plan.

• $2.50 to withdraw funds from an ATM.

• $3.95 to load cash

• $0.50 to check your balance at an ATM

NetSpend does not subscribe to a fee-free ATM network.

Better Alternatives to a NetSpend Card
Picture of card

Not to be blunt, but you can do better.

WiseWage specializes in helping people do better. That’s why we exist. As a result, we have fee-free accounts.

Consider the Varo bank account:

• No monthly fee

• No purchase fee

• Access to 55,000 surcharge-free Allpoint ATMs

• No inactivity fee

• No fee to check your balance at an ATM

On top of that, you can benefit from Varo Money’s savings account. As of May 24th, 2019, Varo’s savings account pays 2.14 percent interest. Additionally, you can deposit checks to the account.

Varo recently announced a new service that should add more to its value proposition. Varo's new No Fee Overdraft service upends the standard assumptions about how banks treat customers who encounter a temporary financial hardship. Most banks charge overdraft fees of up to $37. Varo responds differently and instead gives its customers some grace to make a momentary mistake. For qualifiying accounts (direct deposit, minimum # of swipes in the prior month), Varo will permit an overage of up to $50 without applying any fees or interest charges.

Another difference: Varo Money is a bank account. The NetSpend card is a prepaid debit card.

It pays to shop around to find the best card. WiseWage has done that for you.

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