Prepaid vs. Secured Cards… Do You Know The Difference?

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securedWith the national credit score average being less than perfect, many people have turned to prepaid cards as a way to still shop online, not have to carry a lot of cash, or even receive direct deposit from their employers. But what if there was a credit card you could get with less than perfect credit, and it would actually HELP your credit score? Enter…the secured credit card.

Prepaid cards are basically gift cards, even if you can re-load them. Meaning, even if you use it all the time, and have it for years, it isn’t doing you any good. It isn’t reporting anywhere to show your good habits, it’s not helping you build your credit, it just simply, is. Secured cards, on the other hand, report just like a traditional credit card, when used properly can help you build positive credit, and establish credit history. How do people with less than perfect credit acquire such a card?

Let’s start with this: What is a secured credit card? Simply put, a secured credit card is a line of credit that is backed by the card holder’s deposit. Your credit limit/deposit amount will vary, anywhere from around $100 to a few thousand. Many banks offer at least one secured credit card, and the minimum deposit will vary, but imagine having a card that allows you to do everything you do with that prepaid card, AND can build your credit? It is possible! However, it does not mean disregard the rules and make payments whenever you want, you still need to use it the right way. (See my blog titled, “Credit Cards: The Most Dangerous Game” for the right utilization.)

Ready for your card to start working for you? Click here to see a secured credit card offer: Capital Bank – OpenSky® Secured Visa ® Credit Card

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