If you are seeking for a method to control your finances, you should start by getting a prepaid card! Take a look at this guide and learn everything you need to know about these cards!
Do you know what's the difference between a prepaid and a secured credit card? Have you ever wondered how or where to get a prepaid card? If you still don't understand how they work, you should take a look at this guide!
Differences between a prepaid and a secured card
Although everybody knows how to compare a credit card and a debit card, not many people can explain the difference between a secured credit card and a prepaid debit card.
So, here are a few tips to understand what you can do with these cards and how they compare.
What's a Secured Credit Card
This type of card allows you to borrow credit, but you need collateral for you to do so. This means that you need to make a deposit to the card issuer to use the card.
What's a Prepaid Debit Card
It's similar to a regular debit card because you don't borrow money whenever you use it. The trick is that with a prepaid debit card you load money onto the card beforehand. Then you use the available cash on the card.
The difference between both cards
There are three main differences between these two cards:
Credit Building Ability
If your aim is to build your credit history, then a secured credit card can definitely help! You may want to check if your card issuer reports the credit reporting agencies about your activity first.
On the other hand, the prepaid debit card won't help you with your credit history because you will only be using the money you deposit in your card to spend. That's why they are the ideal card to control your spending!
Regarding the initial deposit, when you open a secured credit card you need to deposit money as collateral before you use the card. This is a method used in case you can't repay your balance. Remember this doesn't mean that you won't be paying a bill every month!
In the case of the prepaid debit cards, you will be in charge of deciding the amount you want to initially put in your card. You will be able to reload it whenever you need more money in the account.
To apply for a secured credit card you will have to go to a bank or a credit card company. The institution will check your credit history during the opening process. Once approved, you will have to make the deposit. It usually is between $300-$500 and it will set your credit limit.
Prepaid credit cards can be purchased whether online or in many stores. You will only need to set the amount of cash you are going to preload and then you are set!
Fees and interest rates
Before you get a secured credit card you may want to check the annual and processing fees and interest rates. They will vary according to the card.
In the case of prepaid debit cards, you won't face any interest, but you may have high fees.
How to get a prepaid credit card
There are plenty of ways to get a prepaid credit card! You can get them online, at a financial services center, or even at a retail store.
As we always recommend, you should make some research first to know your options and get a prepaid credit card that suits you best.
As we mentioned before, there are several ways to get your prepaid credit card:
Buy it in a retail store
You can purchase a prepaid credit card at gas stations, grocery stores and big-box stores. Most of these cases allow you to buy the card with your credit card.
The limit of the prepaid credit card will be the amount of money you pay for the card.
Buy it at financial services centers or currency exchange
Banks, credit unions, check cashing stores and currency exchanges also offer prepaid credit cards. In this case, most of the centers accept the purchase with credit cards.
The benefit of buying a prepaid credit card at these centers is that there are fewer fees than when you purchase it in a retail store.
Get it online!
You can find a wide option of prepaid credit cards available online, and you can buy them with a credit card. Moreover, you can find plenty of deals, like special activation fees.
The best-prepaid cards of the year
The best way to avoid debt is by not overspending. It is as simple as that, but of course that it is not so simple to achieve. This is why prepaid cards are a great option to spend money in a responsible and safe way. Here are some of the best options available.
Brinks Prepaid Mastercard®
This card offers protection against unauthorized transactions and it is a card related to the overall security associated with the name of the company. A great highlight of the Brinks prepaid card is that there are no fees or interest for late payments as it is not a credit card.
You can use the Brinks Money Prepaid App to manage your card account, making it really easy to use. An important thing to consider about this option is that it has a higher monthly fee than other products with similar perks.
NetSpend® Visa® Prepaid Card
The best thing about this prepaid card is its easy-to-understand fee structure, whether you want to pay as you go or make unlimited transactions without additional fees.
As the initial process is more straightforward than other options, you could be making transactions pretty soon.
They offer three separate plans: Pay-As-You-Go where you only incur charges when you need to make a purchase, a Fee Advantage Plan with a $9.95 monthly fee and free unlimited transactions, and a Reduced Monthly Plan (also called Netspend Premier) with a $5 monthly fee and free unlimited transactions.
PayPal Prepaid Mastercard®
PayPal has recently joined the prepaid debit card business, so if you usually use PayPal, you can transfer your funds to the card. This is a great option if you don’t want to wait for them to transfer your money into your bank account.
However, the PayPal Prepaid Mastercard does not offer as many perks as other options, but it is an excellent option for individuals who usually receive a lot of money through their platform. There is a monthly fee of $4.95, which is deducted from the account balance.