Free Articles  >>  Business And Finance >>  Page 1  >> 

Differences Between Prepaid Debit Cards and Secured Credit Cards

Copyright (c) 2010 Tara Tiemann

Many people think that debit cards and credit cards are essentially the same. They do not mind nor care much about the classification of the cards they own. What matters to them is that they have plastic cards that they can conveniently use in making purchases and in paying their monthly bills.

However, such belief can lead to financial problems. For example, if an individual will not closely consider the differences between a prepaid debit card and a secured credit card, he will most likely choose a card program that is not suitable to his financial standing. And this can spell out bigger credit problems in the future, especially when he does not know how to manage his card account properly.

So, to avoid this scenario, we encourage our readers to identify the factors that distinguish one card program from the other. This way, you can choose the right plastic card that will work best to your advantage and that will help you avoid incurring large financial obligations.

Below are the differences between the two popular card programs - secured credit cards and prepaid debit cards.

Differences Between the Two Card Options

Below we have identified three criteria that will highlight the differences between a prepaid debit card and a secured credit card.

1. The purpose of the initial deposit - Fact is that secured credit cards and prepaid debit cards really requires an applicant to submit a certain amount of cash deposit. However, the purpose of such deposit varies from one card program to the other. For example, issuers of secured credit card programs oblige their applicants to provide a minimum deposit of $200. This amount will serve as collateral for the use of the card and as credit limit at the same time.

Meanwhile, the initial cash-out of debit cardholders will be directly deposited to their debit accounts. Since they will not be provided with credit lines, their initial deposit will serve as the available balance that they can use on their cards. When the funds run out, they can simply make new deposits on their card accounts. This will allow them to use their respective prepaid debit cards.

2. Bearing of card transactions - Payments made on secured credit cards are usually reported to the three credit bureaus. This way, people with poor credit ratings can easily monitor the progress in their credit history.

While any transactions made using prepaid debit cards are not being reported to the three credit bureaus. This is because they do not have impact on the credit history of an individual. After all, the prepaid debit cardholder is actually using his own money.

3. Rates and Charges - Consumers with a secured credit card who submit late payments or even miss one will be required to pay additional fees and interest rates. Meanwhile, interest rates do not apply to prepaid debit card programs. This is because the charges are automatically deducted from the initial deposit provided by the debit cardholder. However, additional charges may still apply for every transaction made with the use of a prepaid debit card. Such charges will depend on the terms and conditions stipulated on the prepaid card program.

After this short discussion, we hope that you can now distinguish a prepaid debit card from a secured credit card. And we hope that you can now determine which of these card programs will be most suitable to your financial and personal situation.

About Author Tara Tiemann :

Credit analyst of <a href="" target="_blank"></a> , Tara Tiemann has been a resource site for those who are on debt and wanted to live their lives debt free! If you're on a budget using prepaid debit cards, pre paid credit cards and prepaid cell phone service can save you big money!

Article Source:
Article Url:

Article Added on Sunday, September 12, 2010
Other Articles by Tara Tiemann

Prepaid Debit Card Why Choose It
? Copyright (c) 2009 Tara Tiemann Preferring a prepaid debit card than your own credit card? Find out how it can be more beneficial to you. What are Prepaid Debit Cards? As the name implies, this card are prepaid or paid in advance. Unlike a credit card - which gives you the option to charge purchases in your account and pay for them at a later time, this card doesn't provide a credit line. Instead, it requires its holder to submit cash in his/her account. This cash savings will then be...

What are Prepaid Cards
? Copyright (c) 2010 Tara Tiemann Prepaid cards are more preferred by more and more consumers nowadays. What could be the reason for this switch? Do prepaid cards have better benefits than regular credit cards? The following paragraphs will give the answers to these questions: What are Prepaid Credit and Debit Cards? Prepaid card programs are able to change the way people spend. Through prepaid debit cards and prepaid credit cards, consumers are able to achieve their goal of spending only...

Why Prepaid Debit Cards Are Meant For Young People
Copyright (c) 2009 Tara Tiemann Having a bad credit due to uncontrolled spending is one of the reason why parents are skeptical in giving their children credit cards. But we know that credit cards is important in building a credit history. You won't have to worry about your teenagers having a bad credit. How? Let them use a prepaid debit card instead of a credit card. Yes, a prepaid debit card gives young people the chance to establish an early credit history while minimizing the risk of bad...

Rebuild Bad Credit Using Prepaid Debit Cards
Copyright (c) 2009 Tara Tiemann Applying and getting approved for a credit card is difficult for a person with poor or bad credit score. Credit card issuers are a bit hesitant because they think it would be risky to approve your application since you have a bad credit history. Is there another way to improve your credit rating? One way is by applying for a prepaid debit card. Prepaid card issuers do not conduct credit check so anyone can get approved easily. Since prepaid debit cardholders...

How to Find The Best Prepaid Card
Copyright (c) 2009 Tara Tiemann The best thing about prepaid cards or debit cards is that can be easily obtained even by people with bad credit. However, despite the easy application process, those who want to get a prepaid credit or debit card must make their choice very carefully. In this article, let us discuss the key factors that you should look for when finding the best prepaid card for you. Protection Against Unauthorized Use. Make sure that your prepaid card issuer provides this very...

Prepaid Credit Cards And Its Advantages
Copyright (c) 2010 Tara Tiemann Credit cards, also known as plastic money, is becoming more popular as the years go by. Most people consider credit cards much safer to carry around and more convenient to use when paying bills or making purchases. However, it is also known that not everyone are qualified to own one. Many issuers require good or excellent credit history before granting approval. For people who have no credit or bad credit history, does this mean that cash and check are the...

Which Is Best Student Credit Card Or Debit Card
? Copyright (c) 2009 Tara Tiemann The prepaid debit cards and the student credit cards are types of cards which a student may choose to help them regarding there schooling. But the question is, which among the two cards should a student choose? How does prepaid debit card differ to a student credit card? Having knowledge about this two options may actually help you decide and come up with a sound decision. Read more to find out. The Unsecured Student Credit Card An unsecured student credit...

The Positive and Negative Aspects of a Prepaid Debit Card
Copyright (c) 2009 Tara Tiemann Because of rising amount of cardholders who fall short on their payment, credit card companies introduced an alternative for them. Brought in the market today are secured credit cards and prepaid debit cards for people with poor credit history and who cannot qualify for a regular credit card. What Are Prepaid Debit Cards? Anything you charge to this card will be deducted automatically from the cardholder's funds. To be able to use a prepaid debit card for...

Advantages of Prepaid Debit Cards for Day to day Living
Copyright (c) 2009 Tara Tiemann Most people prefer to use credit cards than debit cards. In fact, cards often have a bad reputation because of their upfront charges and fees. But are there certain advantages that only prepaid debit cards provide? In this article, let's consider advantages that prepaid cards bring: 1. Spend only the money that you have. When you make a purchase and charge it to your credit card, technically, you borrow the purchase you made and pay it back at a later...

In Search for the Best Prepaid Credit Card
Copyright (c) 2009 Tara Tiemann It can be a very challenging task to find the best prepaid credit card that is just right for you. Knowing what to look for is important to make the search easier and faster. Below are some tips on how you can come up with the right choice. Important Factors that Must Influence Your Decision What factors must influence your decision in getting a prepaid debit card? First, you want to go with a prepaid card that is supported by a major processing company like...

Click here to see More Articles by Tara Tiemann
Publishers / Webmasters
Article ID: 262189
DELINK URL from Authors Bio
REMOVE Article
Tell A Friend
Leave A Comment!
Download this article in PDF
Report Article!
Search through all the articles:

183 Users Online!!
Related Articles:
Latest Articles:
Business And Finance >> Top 50 Articles on Business And Finance
Category - >
Advertising Advice Affiliate Programs Automobiles
Be Your Own Mentor Careers Communication Consumers
CopyWriting Crime Domain Names DoT com Entrepreneur Corner
Ebooks Ecommerce Education Email
Entertainment Environment Family Finance And Business
Food & Drink Gardening Health & Fitness Hobbies
Home Business Home Improvement Humour House Holds
Internet And Computers Kiddos and Teens Legal Matters Mail Order
Management Marketing Marriage MetaPhysical
Motivational MultiMedia Multi Level Marketing NewsLetters
Pets Psychology Religion Parenting
Politics Sales Science Search Engine Optimization
Site Promotion Sports Technology Travel
Web Development Web Hosting WeightLoss Women's Corner
Writing Miscellaneous Articles Real Estate Arts And Crafts

Disclaimer: The information presented and opinions expressed in the articles are those of the authors
and do not necessarily represent the views of and/or its owners.

Copyright AwareINDIA. All rights reserved || Privacy Policy || Terms Of Use || Author Guidelines || Free Articles
FAQs Link To Us || Submit An Article || Free Downloads|| Contact Us || Site Map  || Advertise with Us ||
Click here for Special webhosting packages for visitors of this website only!
Vastu Shastra

Linux Server Hosting Provided By AwareIndia

Company IDS