Back in December I wrote up two similar products that have a (well-deserved) bad reputation in the travel hacking community: the netSpend Visa and PayPal Prepaid MasterCard. The cards function almost identically, with a few minor differences:
- The underwriting bank is different, and consequently the PayPal Prepaid MasterCard can't be added as a funding account to some banks;
- The PayPal MasterCard costs $4.95 per month, and has the other features of a "premium" netSpend account.
Those differences are trivial since your account will be shut down within a month. The reason these cards are interesting is that they're Vanilla-reloadable, using Vanilla Reload Network reload cards, and they allow ACH "pulls:" transactions initiated on another bank's website.
As I wrote in my original post,
while reader Tim reported that his netSpend and PayPal Prepaid MasterCard accounts were shut down simultaneously, that wasn't my experience: I haven't loaded or unloaded anything to my PayPal Prepaid MasterCard account, and it's still open, while my netSpend account was shut down a few days after finishing my first month's $5,000 in loads.
Once my netSpend loads rolled off my 30-day history, I loaded another $5,000 to the PayPal Prepaid MasterCard and used ACH pulls to withdraw the money. But my account remained open, giving me the faintest of hopes that I'd be able to use the card for an additional $5,000 per month in manufactured spend in perpetuity.
Then they closed my account.
When it comes to these abusive corporations, a lot of people will tell you to just stay away. My advice is a little more nuanced:
- Know what to expect. You will be shutdown within a month;
- Protect yourself. Withdraw money immediately;
- Most importantly, don't use money you can't afford to be without for up to a month.
When you follow those three rules, there's no reason to think of netSpend as the "enemy" or worry about them "catching" you: they offer a product that allows you to manufacture $5,000 in spend, one time. Whether that product interests you isn't a moral judgment, it's a practical judgment.