Sometimes you could forget putting enough balance in your bank account and your latest payment gets rejected. Or, the payment comes through, but you have to pay expensive fee for negative balance. To prevent customers from experiencing these inconveniences, some banks and card companies allow overdraft. Is Netspend one of them? The answer is yes and we will learn overdraft on Netspend in detail.
What is overdraft?
First thing first, what is an overdraft and why is it good to have? When you use a prepaid card or a bank account, sometimes unintentionally you might withdraw more than the balance you have. For example, if your account balance is currently $50 and you spend $55, it will make your balance negative. In a usual scenario, some banks and prepaid card companies can charge you a fee for the overdraft. In some cases, your financial institute might not even allow overdraft. This means when you try to pay an item of $55, your transaction will not be approved and you will need to just leave a store empty-handed.
Does Netspend prepaid account allow overdraft?
Then, does Netspend allow overdraft? The answer is yes. But, it will not come to you automatically. You first have to enroll in the service. To enroll, go to their website and contact their representative. Once enabled, not only you can make an overdraft transaction but also as long as you meet certain conditions, Netspend won’t charge you even a dime. To avoid unnecessary fees and charges, check the terms and criteria below.
- $10 overdraft buffer: when your balance remains above negative $10, you will not be charged a fee.
- If you make an amount below negative $10, you will be given a 24 hour grace period. This means if you supplement your account above negative $10 within 24 hours from the time you make below negative $10, you will be free of charges.
- If the grace conditions are not met, you will be charged an overdraft fee of $15. Netspend can charge you the fee up to 3 times a month.
- Besides the amount criteria, to have the $10 overdraft buffer and grace period, your account should have at least one direct deposit of $200 or more every 30 days.
Like many other banks or prepaid card companies, Netspend also wants you to use their prepaid account as a primary transaction account. The last condition is to attract people to Netspend.
Types of transactions not eligible for overdraft
This overdraft protection feature is a convenient benefit by Netspend. However, it does not mean that any type of transaction is eligible for overdraft protection. For the following transactions, Netspend won’t guarantee to pay overdraft fees for you.
- Signature purchase transactions
- PIN purchase transactions
- ACH debit transactions
- ATM transactions
Paying an overdraft fee for the transaction types is Netspend’s discretion. You might be eligible for protection if you enroll in their Overdraft Protection Service. When Netspend approves an overdraft transaction, it will be declined. Also, note that any negative amount must be repaid within 30 days to prevent deactivation of the protection service.
Overdraft fees
What you want to avoid is the overdraft fee. Although the fees were mentioned above, it is worth paying attention to the conditions again. Typically, Netspend will charge you a fee of up to $15 every time your balance drops below negative $10. This fee charge can occur up to 3 times per calendar month.
But use it carefully
Netspend overdraft protection must not be used to meet your financial needs. The protection is designed to help you to avoid decline for important purchases. Furthermore, Netspend reserves the right to decline overdraft protection. If you incur too many overdrafts, Netspend may not offer the service anymore without prior notice. Use the overdraft protection carefully only it is needed.
Conclusion
We have learned Netspend overdraft protection and its terms and conditions. The feature is a convenient service that allows you to avoid transaction decline when you purchase a really important item. Please mind that the feature is never designed for consumers to shop using a credit card. It should be used rarely and responsibly. As long as you remember this and the fee conditions, you will be able to enjoy one of the many benefits Netspend offers.
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