Everything about the Secured Credit Cards and Prepaid Credit Cards

Back in the days, there used to be only one type of credit cards. But the last two decades has seen disruptive changes in the financial and credit industry which gave rise to the different types of credit cards. If you’re confused about the all the jargon and multiple options in the credit card spectrum, don’t be intimidated by them and continue reading to find out information about the two highly-used credit cards types; Secured Credit cards and Prepaid Credit cards. These are the best credit card options for the people who’re on lower side of the credit spectrum.
What is a Secured Credit Card?
A secured credit card is immensely similar to the unsecured credit card except for a single factor. A secured credit card does come with a credit limit, where your limit, payment history, and balance are reported to the TransUnion and Equifax. Thus, your secured credit card activity has an impact on your credit score just like a regular credit card. A secure credit card also requires you to pay a monthly due. The only major difference between a secured credit card and a regular one is, you must deposit certain amount of money before acquiring and using a secured credit card.
What is a Prepaid Credit Card?
A prepaid credit card is more like a debit card. With a prepaid credit card, you must first deposit certain amount of money electronically and then proceed with using it. Here, you’re not actually acquiring any credit, thus not being a borrower. For this reason, a prepaid credit card will not have any type of impact on your Credit score, since there wouldn’t be any payment history. Through a prepaid credit card, you’re just going to spend your own money.