5 Differences of Secured Visa Credit Cards Vs Prepaid Visa Card
Are the secured visa credit cards and prepaid visa cards same? For now many people assume that both cards are same. This is far from the truth. The prepaid visa credit cards differ from secured visa credit cards significantly. Why?
According to Max Anderson, there are at least five reasons why the secured visa credit cards differ from prepaid visa cards. These five things are:
Secured Visa Credit Cards Can Increase Your Credit Score
First Repairing Credit
Understanding both cards in conjunction with your credit is very important. For example you want to improve your bad credit. If you choose a prepaid credit card, you do nothing to improve your credit rating. Why? Because prepaid visa credit cards are usually not reported to credit bureaus. Meanwhile, when you issue secured visa credit cards, your account activity is reported to credit bureaus. This means it can improve your credit.
By managing your Visa secured credit cards properly, you not only get access to credit card and the benefits that go along with a single card. But you can also increase your credit score and rebuild your credit history.
Second Deposit
There are similarities between prepaid visa credit cards and secured visa credit cards. When you signing up to get both the credit card, you are required to send money or make a deposit. This is where the cards have in common.
But the mechanism of using the deposit money was different. With prepaid visa credit cards, you can spend your money to buy anything. When you deposit money has run out of your account, there are two options for you. You add money deposit or dispose of your credit card.
This differs from the secured visa credit cards. Enter your deposit money into a savings account and earn interest on your account. Then your credit card company to extend a revolving line of credit equal to the sum of these accounts.
Third Billing and Reports Monthly
With a prepaid credit card, you will not receive monthly statements and bills you must pay. Conversely, with a secured Visa credit card, you will receive monthly reports that must be paid on time. This will impact positively on your credit score. There are several options for you after receiving a monthly billing statement. You pay the minimum amount of maturing bills, pay more than the minimum balance, or pay the balance in full. These activities are then reported to credit bureaus.
Booking Hotel and Car Rental with Secured Visa Credit Cards
Fourth Hotels and Cars
When you check into a hotel, you will be asked whether you use a prepaid credit card. But also many hotels and car rental companies will not accept prepaid credit cards as form of payment. The clear is that there are no hotels, rental car or other that distinguishes between an unsecured credit card from secured visa credit card. This means you can use your secured visa credit cards to book hotels and car rentals without any hassle.
Fifth Moving Forward
Prepaid visa credit cards will probably not develop into an unsecured credit card. But, it is not uncommon for secured Visa credit card evolved into an unsecured credit card. That is after you are able to improve your payment history and have proven that you can be trusted with the card.
(Important for Student or Their Parent: Student Visa Credit Card).
This is the five differences between secured visa credit cards and prepaid credit cards. Admittedly there are some between both cards, but more differences. Therefore if you want to rebuild your credit, having secured Visa credit cards is the right option.
