Dear Credit Karma, What is the difference between a secured credit card and a prepaid debit card?
The biggest difference between a secured credit card and a prepaid debit card is that a secured credit card builds your credit history (it is a credit card), while a prepaid debit card does not (immediately spends your money, not credit). They both require that you deposit your money upfront—with a secured card, your money is a security deposit to be deducted if you default on payments; with a prepaid debit card, your money is loaded into the card and is deducted directly when you spend. Keep in mind, there are differences between these cards in their purpose, function, and fees. The following points will help you decide which one is right for you. Secured Credit Card • A secured credit card is designed for people with poor credit or those who need to build credit from scratch. • Requires a security deposit from the cardholder, usually at least $200, which also typically sets your credit limit. • Security deposit is a cash collateral, and if you default on payments, your monthly paymen
