Which is Best for Rebuilding Credit—A Prepaid Card or a Secured Credit Card?

If you intend to rebuild your credit record, you may realize that using a credit card can be an effective way to do so. However, you may face a real challenge because people with bad credit may not qualify to apply for and obtain most of the traditional credit card products available in the market.

Fortunately, consumers who like to use plastic cards for purchase transactions may still be qualified to apply for and use a prepaid credit card or a secured credit card.

Of course, the secured credit card is the better option if you want to use the plastic card for gaining positive credit scores. But it does not mean that prepaid cards will be disregarded. Those may still have advantages that may possibly help in any way to improve credit standing.

Prepaid Cards
A prepaid credit card is actually not considered by many as a real credit card. It works like a typical bank debit card. You need to deposit any mount on the prepaid card account through any available mode like a direct bank deposit or a bank transfer.

Apply for the Account Now Gold Visa® Prepaid Card below:
Account Now Gold Visa<sup>®</sup> Prepaid Card
Account Now Gold Visa® Prepaid Card

  • Perfect for tax refund direct deposit – Get your tax refund fast
  • 100% Guaranteed Approval – up successful ID verification
  • $0 Activation Fee
  • $15 Bonus§ with Free Direct Deposit
  • Shop online & Pay bills online
  • Up to $10,000 balance limit
  • Deposits are FDIC insured
  • BBB Accredited A+ Company

Apply Now!

The moment it gets reloaded, the prepaid card may already be swiped for any purchase you make wherever there is acceptance for Visa or MasterCard. And yes, it can be used for online shopping.

The setbacks of this product come in two ways. First, you may not be able to use the card once it runs out of fund. You may need to transfer money into it or make deposit to the account if you intend to keep using it.

Second, the prepaid card may not help increase your credit score. That is because you are actually spending the money you have deposited into the account. But in a way, you may not fall into the trouble of exceeding credit limits or even overspending, which may indirectly help avoid further incurring negative credit points.

Secured Credit Cards
If you aim to improve your credit history, you may have to choose the secured credit card. It actually works more like any traditional credit card. However, in this product, you may have to first make a one-time cash deposit that may range from about $200 to $5,000.

The amount of deposit will be equal to your credit limit. It logically serves as a security in case you fail to shoulder your credit card bill, which you must not do if you want to establish a good payment record.

First Progress Platinum Elite MasterCard® Secured Credit CardFirst Progress Platinum Elite MasterCard® Secured Credit Card

  • Nationwide Program – though not yet available in NY, IA, AR, or WI
  • Credit Line Secured by Your Fully-Refundable Deposit of $300 — $2,000 Submitted with Application
  • Just Pay Off Your Balance and Get Your Deposit Back at Any Time
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Good for Car Rental, Hotels; Anywhere Credit Cards are Accepted!
  • No Credit History or Minimum Credit Score Required for Approval
  • 24/7 Access to Your Account Online

Apply Now!

The security deposit requirement may turn off most consumers. But if you are aiming to improve your poor credit score, you may have to deal with it. It helps anyone qualify for and obtain a secured credit card. This is the best reason why this product is perfect for rebuilding credit especially following a credit-devastating foreclosure or bankruptcy.

Just beware because both prepaid and secured cards usually come with heftier fees. But if you will be more determined and patient, you can possibly find options with lower annual and basic fees. It is also possible to avoid additional per-transaction fees. Which of the two can you consider your better option today?

Next read: What Are the 6 Things You Should Always Keep in Your Wallet?

Courtesy of CreditCardShoppe.com



  1. Pretty great post. I simply stumbled upon your weblog and wished to mention that
    I’ve really enjoyed surfing around your blog posts. In any case I’ll be subscribing in your rss feed and
    I’m hoping you write again soon!

Speak Your Mind