Prepaid, Debit & Secured Credit Cards

Choose prepaid, debit and secured credit cards from leading financial institutions that best fit your financial needs. These cards are ideal for people with poor credit or no credit history. There are even prepaid teen cards available to help promote responsible spending for young consumers.

Secured Credit Cards

Prepaid and Debit Cards

 

Let’s break it down and explain how each type of card works so that you will hopefully gain some insights as to which kind will best serve your financial needs. There are some similarities to be sure, but there are also some differences that must be addressed as well.

First off, to label a prepaid credit card as a credit card is incorrect. They are not in fact credit cards at all because there is no credit being extended. The purchaser of the card deposits money into an account which can then be accessed to purchase goods and services.

The advantage here is that prepaid cards can be used to withdraw cash at ATMs and buy things wherever credit card transactions are processed. They can also be used to order merchandise online and over the phone from catalogs and so forth.

There is no credit check necessary because the cardholder is accessing and using their own funds. That means that whenever the individual applies they will receive instant approval and can begin using their card as soon as they receive it.

Prepaid cards are often referred to as loaded cards, or preloaded cards. Whenever you hear these terms used know that they are all one in the same. This has caused some confusion amongst consumers in the past.

A debit card is a card that is used by the account holder that deposits money into a checking account with their bank of choice. The cardholder can then add and withdraw cash through ATM machines and use their card to make purchases.

There are limited by only the amount of money that is deposited in their linked checking account. In many cases overdraft protection is available which means that if the consumer is attempting to buy something that costs more than what they’re available balance is, the transaction will still be approved.

Unlike prepaid and debit cards, secured credit cards are in fact credit cards. The applicant must deposit collateral in the form of cash into an account. Then a fixed dollar amount of credit will be assigned to the cardholder which can be accessed.

Over time the credit limit will be increased when the cardholder shows that they can responsibly manage their line of credit. Secured credit cards can also be used to rebuild and restore credit ratings because payment activity is reported to the three major credit bureaus Experian, TransUnion and Equifax.

Instant Approval Credit Cards

Related Information:

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