Secured Credit Cards are not the same as Prepaid Credit Cards, actually they are significantly different from one another.
A prepaid credit card account is opened by depositing money into that account, similar to the way you would open a checking or savings account in a bank. When you send in the money to the prepaid credit card company, they credit that amount to your account and you are issued a prepaid credit card that can be used anywhere a regular credit card is accepted. You can used your prepaid credit card until you have money in your account. Once all the amount is spent, you can’t spend anymore until you make another deposit.
A secured credit card is also issued by depositing funds in an account, but the deposit provided is held in a special savings account. You can earn interest on this account. After making the deposit, you are still expected to make regular payments and follow the terms and conditions as with any regular credit card.
With a prepaid credit card, you do not receive any monthly statements where payments need to be made. A secured credit card is much like a regular credit card in this way, you receive a monthly statement that must be paid on time. You can pay the minimum amount due, upto the full balance.
If you are looking into secured and prepaid credit cards, chances are that your credit rating needs some improvement. If that is your intent, then opting for a prepaid credit card will not help you in anyway to improve your credit rating. Debit transactions do nothing to your credit rating as typically they are not reported to the credit bureaus.
With a secured credit card, you can see it as a means of rebuilding credit. Your account activity is reported to the credit bureaus, thus helping you with your credit rating and increase your credit score.
