Compare secured credit cards vs. prepaid debit cards

Secured credit cards and prepaid debit cards are two of the most popular and available alternatives to credit cards. Both provide the same freedom as a credit card, but without the risk of falling into debt. They can be used to build credit, pay for everyday expenses or can be used as a stepping stone to an unsecured credit card. Here’s everything you need to know about secured credit cards and prepaid debit cards.

Secured credit cards vs. prepaid debit cards

While secured credit cards and prepaid debit cards may seem very similar in theory, there are actually several major differences. Here’s a quick rundown of a few of the main features that separate the two:

What is a secured credit card?

Secured credit cards offer the advantages of an unsecured credit card even if you have poor credit. The main difference between secured and unsecured credit cards is that secured cards require a deposit that often serves as your credit limit.

How do secured credit cards work?

Secured credit cards work similarly to unsecured credit cards. The primary difference is you’ll need to provide a security deposit in order to obtain a secured card.

Unsecured credit card issuers rely on your credit history as assurance that you’ll pay off your purchases. With secured cards, however, your deposit acts as collateral. Secured credit cards are easier to be approved for — especially for those with limited or poor credit.

When are secured cards better than prepaid debit cards?

Secured credit cards allow you to use the lender’s money on credit with the promise to pay it back later. The greatest advantage secured cards have over prepaid cards is that it helps you build your credit score as you use it.

Secured credit cards also offer more flexibility in your spending, and some offer rewards programs, benefits and other perks that aren’t available on prepaid debit cards.

Pros and cons of secured credit cards

Compare secured credit cards

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Name	Product	Filter values	Minimum deposit required	Purchase APR	Annual fee	Recommended minimum credit score
Citi® Secured Mastercard®			Starting at $200	22.49% variable	$0	New to credit	A no annual fee secured card for people who are new to credit or have limited credit history.	Apply now View details	Compare	loading Fetching your data...
Self Visa® Credit Card			Starting at $100	21.74% variable	$25	300	Build your credit with a low minimum security deposit of $100 and no credit score required.	Apply now View details	Compare	loading Fetching your data...
OpenSky® Secured Visa® Credit Card			Starting at $200	17.39% variable	$35	300	Apply for this card with no credit check if you're new to credit or have bad credit.	Apply now View details	Compare	loading Fetching your data...
PCB Secured Visa®			Starting at $200	18.9% fixed	$39	300	Choose your initial deposit amount and credit limit from $200 to $1000. Rates & fees	Apply now View details	Compare	loading Fetching your data...
OakStone Platinum Secured Mastercard®			Starting at $200	9.99% variable	$49	300	Build credit and enjoy an ultra-low APR on purchases of 9.99% variable with this secured credit card.	Apply now View details	Compare	loading Fetching your data...

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What is a prepaid debit card?

Prepaid debit cards are not linked to your bank account. Instead, you load money onto the card and once it runs out, you can either load more or get a new card. There are no credit limits, monthly bills or interest charges like a credit card, but you’ll still be able to use it anywhere you’d use a standard debit card.

How do prepaid debit cards work?

Unlike standard debit cards and credit cards, you won’t need to go through a financial institution to get a prepaid debit card. Prepaid debit cards can be purchased at grocery stores, pharmacies, corner stores and a handful of other locations, making them much easier to get. Once you’ve obtained a card, there are a number of ways you can load money onto it:

Once your card is loaded, you can use it to make purchases anywhere you’d use a normal debit card. This includes goods and services at retail locations and even online bill payment for some cards.

Pros and cons of prepaid debit cards

When are prepaid debit cards better than secured credit cards?

Prepaid debit cards and secured credit cards are very similar in that they both provide a means to manage your spending. While secured credit cards offer more flexibility in your spending, they may promote bad habits since you aren’t actually spending your own money.

Prepaid debit cards encourage responsible spending and budgeting, and offer a secure way to manage your cash without a bank account. However, you’ll want to look for a low-fee prepaid debit card in order to cut back on the associated fees.

Compare prepaid debit cards

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Name	Product	Annual or monthly fee	ATM withdrawal	Features
Brinks Prepaid Mastercard		$9.95 per month (or $5 with a $500+ direct deposit, or $0 with pay-as-you-go)	$2.50	Mobile app Direct deposit Payback rewards	No credit check. No minimum balance. No late fees because this is not a credit card.	Go to site More Info	Compare	loading Fetching your data...
Netspend Prepaid Mastercard, WWE partner		$9.95 per month (or $5 with a $500+ direct deposit, or $0 with pay-as-you-go)	$2.50	No activation fee Payback rewards No minimum balance required	No credit check, mobile check load, and now a WWE partner	Go to site More Info	Compare	loading Fetching your data...
Control Prepaid Mastercard		$7.95 per month (or $5 with a $500+ direct deposit)	$2.95	Custom Card Direct Deposit Cash Back Rewards	No overdraft fees on card purchases. No credit check. No cost to order	Go to site More Info	Compare	loading Fetching your data...
Netspend All-Access Account by MetaBank		$5 per month	$0	Earn cash back on everyday purchases Earn up to 6% APY with an optional Savings Account Receive your paycheck up to 2 days earlier with Direct Deposit	With Netspend All-Access Account by MetaBank there's no credit check and no minimum balance to open an account.	Go to site More Info	Compare	loading Fetching your data...
PayPal Prepaid Mastercard		$4.95 per month	$1.95	Manage money on the fly Receive special offers and cash back rewards Get your state and federal tax refund faster than a paper check	Use the no-cost direct deposit service and have access your funds up to two days faster than what traditional banks offer.	Go to site More Info	Compare	loading Fetching your data...

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Bottom line

If you’re looking to improve your credit, secured credit cards are often the best choice. However, if you’re just looking for a way to manage your finances, prepaid debit cards offer most of the benefits of a standard debit card without a bank account.

As with any major financial decision, you should always weigh your options to find a product that best suits your needs. Learn more about how credit and debit cards are different, or explore secured credit cards and prepaid debit card options, then apply for the card that’s right for you.