Secured cards and prepaid cards have striking similarities but they are different in many ways. When considering either card, please examine fees carefully.
Secured cards vs. prepaid cards
|Secured cards||Prepaid cards|
|Allows you to spend only the amount of money that backs your card.||?||?|
|Payments are reported to credit bureaus so these can help you build or re-establish credit.||?|
|Card payments aren’t reported to credit bureaus.||?|
|Offers the same legal protections as regular credit cards, such as zero liability for fraud.*||?|
|May have annual or monthly fees.||?|
|May have higher interest rates.||?|
|Comes with extra fees (customer fees or point-of-sale fees).||?|
* For now, most prepaid cards aren’t covered by federal laws.
More On Secured and Prepaid Cards:
- Basics of secured cards vs. prepaid cards
- The best prepaid credit cards
- 10 questions to ask before getting a secured card