Reasons why a secured visa credit card is better than a prepaid card

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Secured credit cards are primarily used for establishing credit than managing expenses. On the other hand, prepaid card is a debit tool which is majorly for convenience and budgeting. However, it would have no impact on your credit.

The main different between these two mechanisms is: with secured credit cards, the money which is being spent is borrowed from the credit card company. The money which is borrowed is returned with applicable interest rates. On the other hand, with prepaid cards, the money is loaded into the card before it is spent.

Although you can get to know more about it on kreditkort, this article will guide you over why secured visa credit card can be better than prepaid debits cards.

  1. Establishing credit

If you want to establish credit, or re-establish credit, then only a secured visa credit card can help. This is because the payments which you will make to the credit card company is included and reflected in the credit report and history. If the payments are made on time and all the balances are properly managed, then the credit score will be significantly improved. Once the credit score is improved, you may quality to get regular credit cards. This is not the case with prepaid cards.

  1. Beneficial in emergencies

Credit cards can be beneficial during emergencies. With prepaid cards, you need to have money loaded into the bank account. However, this is not the case with  credit card. You will be borrowing money from the credit card companies, and thereafter, the payments are to be returned. Although the repayments are to be done after payment of interest, you can get hands on instant money to deal with your emergency effectively. In this context, it is a much better option compared to prepaid debit card.

  1. Earn rewards

Credit cards are often associated with different kinds of rewards. For example, upon spending a certain sum of money, you will be able to earn rewards. These rewards may be in the form of discounts, shopping points and much more. Thus, this is an incentive that you get for using secured credit cards. This is something which is not available with prepaid debit cards.

Should you always use visa credit card?

As it appears from the above, credits are beneficial. In some instances, these are necessary. For example when forming credit, credit cards are needed. However, financial experts are of the view that these cards should not be used always. Sometimes, these cards can cause you monetary loss. For instance, sometimes the interest rates can be high for you to cope up with the same. This can result into high financial charges.

Moreover, credit cards are not suitable for budgeting option. You will be spending money that you do not even have. This can cause budgeting concerns. On the other hand, with debit cards, you will only be spending money that you have in your bank account. It helps you to budget in the right manner.


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