Green Dot Review [2024]: A Prepaid Account With Cash Back

Green Dot Cash Back Visa Debit Card details

The Green Dot Cash Back Visa Debit Card is the centerpiece of Green Dot's offerings. It's a prepaid debit card that functions much like a checking account, allowing you to make purchases, withdraw cash, and receive direct deposits. The standout feature is the unlimited 2% cash back on online and mobile purchases, which is generous for a prepaid card.

However, the $7.95 monthly fee is steep and can only be waived if you spend $1,000 or more in the previous month. A few transactions are excluded, so be sure to review your customer agreement carefully.

This fee can quickly eat into your cash back earnings if you're not a big spender. On the plus side, there's no minimum balance requirement, which makes it accessible to those who might struggle to maintain minimums at traditional banks.

Green Dot High-Yield Savings Account basics

The Green Dot High-Yield Savings Account comes automatically with the Cash Back Visa Debit Card. The 2.00% (as of 07/05/24) APY isn’t quite as high as what many online high-yield savings accounts offer, but it’s impressive for a product linked to a prepaid card. There's no separate monthly fee for the savings account, but you need to have the Cash Back Visa Debit Card to access it.

One major drawback is that you can only earn the high APY on balances up to $10,000. For larger savers, this significantly limits the earning potential. Additionally, interest is only credited to your account once a year on your account anniversary, which is unusual compared to most savings accounts that compound and credit interest monthly.

What we like about Green Dot

• Green Dot mobile app: The Green Dot app makes it easy to manage your money on the go. You can pay bills, deposit checks, transfer money from another bank account, and more. The Green Dot app is available for both iOS and Android devices. You can also view your account information on your online Green Dot account.
• Unlimited 2% cash back: You can earn unlimited 2% cash back for online and mobile purchases or through apps, including Uber, Instacart, Amazon, and Netflix. Any subscription service, online shopping, or app purchase made can earn you 2% cash back when you use Green Dot as your payment method. However, you can only access your cash back once per year — it’s paid out on your account anniversary.
• High-yield savings account: The Green Dot High-Yield Savings Account comes free with your Green Dot Cash Back Visa Debit Card, which is indeed a high-yield savings account. It earns you an APY of 2.00% (as of 07/05/24) on balances up to $10,000.
• Early access to your paycheck: When you set up direct deposit, you may receive your paycheck up to two days earlier than your normal payday. If you receive government benefits, you may receive that money up to four days early.
• Free in-network ATM access: Green Dot’s network of free ATMs can be found all across the country, including at participating CVS, Walgreens, and Rite Aid stores.
• Free cash deposits: The Green Dot app allows you to conveniently deposit cash and reload your card free of charge at nearly 100,000 participating retailers, including Walmart, Walgreens, 7-Eleven, and more. This is a significant advantage over many online-only banks.
• Mobile check deposits: Many bank account users consider the ability to deposit paper checks an essential feature. Green Dot allows you to deposit checks directly through its mobile app.

What Green Dot could improve

• Monthly fee: While the $7.95 monthly fee can be waived by spending $1,000 or more per month with your debit card, this threshold may be challenging for some users to meet consistently. For those unable to meet this spending requirement, the fee could significantly reduce the benefits of the cash back rewards. It may be particularly burdensome for those on a tight budget.
• Foreign transaction fee: Green Dot charges a 3% foreign transaction fee on each transaction made with merchants outside the U.S. This charge may be in addition to any of Green Dot’s other fees, such as the $3 teller cash withdrawal fee and $3 out-of-network ATM fee. If you plan to travel, you might want to use a credit card with no foreign transaction fees instead.
• Limited access to cash back: The unlimited 2% cash back on online and mobile purchases is a nice feature, but you can’t access or spend your cash back until you’ve reached each account anniversary. In other words, you can only access your cashback bonus once a year.
  
  Your account also has to be in good standing. If you have a negative balance, you must bring your account to a positive balance before you get your cash back. This annual payout is unusually restrictive and raises concerns about what happens if you close your account early.
• Interest is deposited only once a year: Although balances in your Green Dot high-yield savings account earn a high APY of 2.00% (as of 07/05/24), the interest earned is deposited only once a year on your account anniversary.
• Potential for additional restrictions: Green Dot notes that it can impose additional ATM withdrawal limits at its discretion. This lack of transparency could lead to unexpected limitations on accessing your own money.
• Limited earning potential: You can keep any amount of money in your Green Dot high-yield savings account, but you’ll earn only interest on average daily balances of up to $10,000. If your average daily balance goes over $10,000 for the year, you won’t earn the annual interest. This limits your earning potential.
• Customer service and reputation: Many users report negative experiences with Green Dot's customer service and account management.

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Who is Green Dot best for?

Green Dot may be an option to consider for individuals who:

• Have been denied traditional bank accounts due to past banking issues
• Frequently make online and mobile purchases and can benefit from the 2% cash back
• Want the option to deposit cash easily
• Can benefit from early access to direct deposits
• Are comfortable with online and mobile banking

However, it's crucial to explore alternatives before choosing Green Dot, even if you've had trouble qualifying for traditional bank accounts. Many other financial institutions offer second-chance banking or don't use ChexSystems, potentially providing better terms and more flexibility.

Alternatives to Green Dot

While Green Dot offers some unique features, there are other accounts that might better suit your needs, especially if you're looking to avoid monthly fees or want more flexible access to your rewards:

Chime®

Chime is a financial technology company, not a bank.⁶ You can open online accounts through Chime that have no monthly service fees, minimum balance requirements, or foreign transaction fees.⁷ Chime also offers a 2.00% (as of Sept. 9, 2024)⁸ APY savings account with no balance caps.

Visit Chime® or read our full Chime review.

Varo

This high-yield savings account offers up to 5.00% (as of 07/01/24) APY on balances up to $5,000 when you. make qualifying direct deposits. Like Green Dot, Varo offers early direct deposit and no minimum balance requirements, but without monthly fees.

Visit Varo or read our full Varo review.

U.S. Bank Smartly Checking

The U.S. Bank Smartly Checking account is known for being more lenient towards individuals with ChexSystems records. It offers tools to help improve financial wellness, and while it has a monthly fee of $6.95, it can be waived under certain conditions.

Visit U.S. Bank

Current

Current⁹ offers fee-free overdraft protection up to $200 with qualifying direct deposits.¹⁰ The company also offers Savings Pods that earn up to a 4.00% (as of Nov. 21, 2023) bonus.¹¹ It also doesn't use ChexSystems or credit checks to open accounts.

Visit Current or read our full Current review.

These alternatives often provide similar features to Green Dot but with more favorable terms and fewer restrictions. It's worth exploring these options before committing to Green Dot, especially if you're in a challenging financial situation.

How to open a Green Dot account

1. Purchase a Green Dot Cash Back Visa Debit Card at a participating retailer.
2. Visit GreenDot.com/activate or call 1-866-795-7597 to activate your card.
3. Provide personal information, including your name, address, date of birth, and Social Security number.
4. Set up your online account and download the mobile app.
5. Fund your account via direct deposit, bank transfer, or cash deposit at a participating retailer.

The process is relatively straightforward, especially compared to traditional banks. There's no credit check required, which can be a significant advantage for some customers. However, be prepared to provide personal information for identity verification purposes.

How to deposit cash into a Green Dot bank account

Green Dot offers five ways to deposit money onto your card: direct deposit, bank transfer, mobile check deposit, PayPal, and free cash deposit with the Green Dot app.

Unlike most online and mobile banking services, it’s possible to deposit actual cash into a Green Dot account. Depositing cash into your Green Dot account is also convenient, given the variety of participating locations.

With the Green Dot app, you can deposit cash free of charge at nearly 100,000 participating retailers nationwide. To do this, log into your Green Dot app, generate a deposit code, and present the code and your cash to the cashier.

Here are a few popular retail stores where you can deposit cash into your Green Dot account:

• 7-Eleven
• ACE Cash Express
• CVS Pharmacy
• Dollar General
• Family Dollar
• Kmart
• Kroger
• Rite Aid
• Safeway
• Walgreens
• Walmart

How to withdraw money from a Green Dot account

You can withdraw money from your Green Dot account in several ways. If you want to withdraw cash, you have access to a network of thousands of fee-free ATMs that can be found in a variety of participating locations, such as CVS, Walgreens, and Rite Aid stores.

There are no Green Dot bank locations, but you can withdraw cash directly from a participating bank for a $3 fee. Keep in mind that each bank may also have its own fee for teller cash withdrawals. This can really add up over time if you have to withdraw cash frequently.

If you want to send money to someone else, you can do so by writing a check or by transferring money through the Green Dot app. Most online bank accounts don’t issue paper checks, so the fact that Green Dot has this feature is a bonus.

Other Green Dot Cash Back Visa fees

Green Dot customer service

Green Dot customer support can be contacted by phone at 866-795-7597, through its email form, or by mail. It also offers live chat from 5 a.m. to 9 p.m. Pacific.

The Green Dot mailing address is:

Green Dot Corporation
P.O. Box 5100
Pasadena, CA 91117

While Green Dot provides multiple contact options, it’s worth noting that many customers have reported challenges with customer service in online reviews. If you choose to use Green Dot, it may be helpful to document your interactions and be prepared to follow up persistently if issues arise.

FAQs

Bottom line

Green Dot offers an interesting mix of prepaid card convenience and online banking features. For those who've struggled with traditional banking, it provides access to modern banking features.

However, the monthly fee, negative customer reviews, and annual reward payout are significant drawbacks. While Green Dot can benefit some users, particularly frequent online shoppers, many might find better value in fee-free alternatives with similar features.

If you're considering Green Dot due to past banking issues, explore other second-chance banking options or banks that don't use ChexSystems first. These may offer more flexibility and better terms to help rebuild your financial health.

Ultimately, the right choice depends on your specific needs and circumstances. Take time to compare options and find the best fit for your financial journey.