Actually, debit cards and credit cards are different from each other. If an individual will not closely consider the differences between a prepaid debit card and a secured credit card, he will most likely choose a card program that is not suitable to his financial standing.

Let’s identify the factors that distinguish one card program from the other. Below are the differences between the two popular card programs – secured credit cards and prepaid debit cards.

*The purpose of the initial deposit – Secured credit cards and prepaid debit cards both require the submission of cash deposit. However, the purpose of such deposit varies from one card program to the other. For example, issuers of secured credit card programs oblige their applicants to provide a minimum deposit of $200. This amount will serve as collateral for the use of the card and as credit limit at the same time.When the funds run out, they can simply make new deposits on their card accounts. This way, they can continue using their respective prepaid debit cards.

* Bearing of card transactions – Payments made on secured credit cards are usually reported to the three credit bureaus. This way, people with poor credit ratings can easily monitor the progress in their credit history. While any transactions made using prepaid debit cards are not being reported to the three credit bureaus.

*Rates and Charges – Consumers with a secured credit card who submit late payments or even miss one will be required to pay additional fees and interest rates. Meanwhile, interest rates do not apply to prepaid debit card programs. This is because the charges are automatically deducted from the initial deposit provided by the debit cardholder. However, additional charges may still apply for every transaction made with the use of a prepaid debit card. Such charges will depend on the terms and conditions stipulated on the prepaid card program.