The Difference Between A "Secured" Card And A "Prepaid" Card:

You’ll get a test question on this in a minute, so listen up!

“Prepaid” cards are generally issued by ripoff companies.

• They generally don’t build your credit.
• They are more like a very expensive "debit" card than a "credit" card.
• They usually have huge fees.

"Secured" cards on the other hand are real "credit" cards, but use your savings to guarantee payment.

• For instance, a good bank might say, "Put $500 in a savings account and leave it there, and we'll issue you a credit card with a $500 limit."
• Generally, most good financial institutions offer "secured" cards.
• Secured cards definitely can help build your credit.
• Most companies that issue secured cards will convert them to "unsecured" cards after they see you pay your bills on time.