Secured Credit Cards are Different From Prepaid Credit Cards

Secured Credit Cards versus Prepaid Credit Cards

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Secured Credit Cards Versus Prepaid Credit Cards

Secured Credit Cards are different from Prepaid Credit Cards in critical ways despite their similar sounding names.  It’s understandable that the lines seem to be blurred.  Let’s focus on what makes secured credit cards versus prepaid credit cards different from each other.

Prepaid credit cards:

  • Reloadable cards that operate as debit cards
  • No bank account or credit check is required
  • Does not report to the major credit bureaus
  • Does not affect your credit score because you are not borrowing money
  • Confusing array of fees including activation, monthly maintenance, transactions, ATM, balance inquiries, adding money, inactivity
  • Useful only in an emergency temporary way with no help towards a better future

Secured credit cards are Different From Prepaid Credit Cards.  A secured credit card is….

  • Offered by major credit card companies
  • Operates like a credit card
  • Reports to Credit Reporting Agencies
  • Helps to rebuild credit by establishing track record of recent compliance
  • Credit Limit is the amount you have on deposit
  • Paid monthly like a real credit card
  • Debt to available credit is just as important to your score as it is on a real credit card

 Secured Cards are an Intermediate Step Towards a Real Credit Card

You may need the “training wheels” for a while.  Prove your responsibility be following the rules to the letter. If you are rebuilding from the bottom up you need secured credit cards.  You need to use these cards to establish your new policy of paying your bills on time. You will earn the right to a real credit card in due time by being consistent in your payments without exception.  Secured credit cards are different from prepaid Credit cards and they are both different from the real thing.

What is a Real Credit Card?

Understandably those who don’t have a real credit card feel left out of the system.  A real credit card is a privilege you earn not a right you have.  It says to the world that someone somewhere feels you are trustworthy enough to be advanced at least some money.  No matter how small the credit line may be at first it becomes the foundation for bigger and better things.


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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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