What is the Difference Between a Prepaid Card and a Secured Card?
January 6th, 2010
When you have less-than-stellar credit, you may need to apply for a secured credit card or a prepaid card rather than a traditional credit card. Each type of card is designed to take care of different types of credit card challenges. Only a secured card will help you rebuild your credit, though.
SIMILARITIES BETWEEN PREPAID AND SECURED CARDS
- Money up front
Both prepaid credit cards and secured credit cards require money up front from the consumer. The amount of money is different for each type of card. - Fees
There are sometimes application and transaction fees associated with these cards; shop around for the best terms. - Easy to get
Both of these cards are easy for consumers with bad credit to get once they find the card they want.
HOW THESE CARDS WORK
- Secured cards
Secured credit cards work the same as regular credit cards, except your own savings account acts as the collateral for your secured-card purchases.