Wednesday, April 17, 2024
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Prepaid Credit Cards to Build Credit

Prepaid Credit Cards to Build Credit

Credit card usage is increasing at a rapid pace and people of all ages. Earlier only adults were more prone to these digital payments, but now even students are eligible or they wish to get credit cards in their pockets.

However, different financial institutions have different types of credit cards like cashback/travel/rewards/students/secured/co-branded credit cards and more.

At the time of making a decision to use a credit card, it is important to consider your spending limits, habits and rewards- that are top priority. 

Likely one of those credit card types we are here to discuss is prepaid credit cards.

What are prepaid cards?

Prepaid cards are those that can help individuals to make purchases beforehand. But to make this happen, you must load money to it so make an easy and hassle-free purchase.

This means, you can load money into a card at a store, bank and also online. So, once you have loaded money to it then it becomes easy to make a purchase easily.

But are prepaid cards proven beneficial?

Prepaid cards are considered to be one of the good options for people who wants to build the

Credit history

Prepaid cards are best to develop credit history (at the time you have bad credit). This happens when you are making payment at every time, it is directly reported to credit bureaus.

Must set a budget

It gives you the flexibility to only set a budget to spend. This means, the more money you will load to your card the one can be spent.

Easily protect yourself from debt

Yes, it is quite an easy way to be away from debt because you will not be able to spend more than you loaded.

Likewise, there are many prepaid cards available by different financial banks/institutions to let individuals get the best offers and perks. Let us help you to determine them all.

Secured card versus prepaid cards

We have different types of credit cards and we have secured and prepaid cards. Perhaps they both have a distinct role.

Secured cards are mainly used to help people build their credit history. All it requires is a security amount that equals the limit of your card spending. 

But when we talk about prepaid cards then they do not carry a credit check. This means even if you have a low score then also you are eligible to use them. They work the same way credit cards work and in turn help to complete purchases with different perks associated within them.

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Top 7 Prepaid cards to build a good credit history

Several cards are available in the market, but when it comes to spending only the required amount prepaid cards come into play. Therefore, we have researched the top 7 prepaid cards that can make you meet your requirements and let you be away from debt. Look at them all below and find the one suitable for you as per your day to day requirements.

  1. Chime® Credit Builder Visa® Credit Card

Chime® Credit Builder Visa® Credit Card is a card that comes into a secured card that can help people establish their credit history. This means if you have a low or fair credit score then this prepaid card is the best.

The card works quite easily, all you need is to load the amount to it. At the time you have made a purchase, you can easily pay with the help of the Chime® Credit Builder Visa® Credit Card.

In this manner, you will not be able to miss your payment.

Perhaps this is one of the best options when you are looking to issue a card with $1000. But yet comes with certain drawbacks as well. Despite this is one of the most adopted credit cards (prepaid) among individuals.

Pros

  • There is no annual fee and this makes up this card the first priority among individuals.
  • No interest charges are applicable so it becomes easy to use.
  • Users do not have to be worried about their credit history.

Cons 

  • Need to open the Chime checking account through which the Chime® Credit Builder Visa® Credit Card can be issued.
  • A security deposit is being paid which is $200.

  • Eligibility requirements
  • Must be 18 years or above
  • Must be a U.S. citizen
  • A social security number is a must
  • Proof of income is a must

 

  1. Bank of America® Customized 

Another into the list of prepaid credit cards then Bank of America® Customized is one of those. It is considered one of the safe and secure options for borrowers and improves credit cards. This is the reason it is a good option for rewards and benefits.

There are different perks available within Bank of America® Customized. Also, let customers check your FICO score for free and the ability to move to an unsecured credit card. Majorly in the U.S most of the people tend to adopt this card because of its long term benefits.

Pros

  • There are no annual fees required
  • Up to 3% cashback facility rewards
  • Flexible credit cards

Cons

  • A security deposit of $200 is the minimum.
  • There is no welcome bonus.

Eligibility requirements

  • Must require a security deposit to issue the card.
  • You must be 18 years old.
  • Must be a U.S citizen.

Rewards facility

  • Up to 3% cashback facility on gas, online shopping, dining, travel, and home improvement.
  • 2% of the back grocery store and wholesale and that clubs on the first purchase of $2,500 and then earn 1%.

  • Reflex® Platinum Mastercard®

Reflex® Platinum Mastercard® is another card for borrowers who want to build their credit card. It is one of the unsecured cards and you do not want to get into security deposit.

Its online application process is quite fast and yet easy. This means you do not have to be worried about your credit score. This means it gives individuals the flexibility to adopt the card in a best-suited manner.

Pros

  • All credit types are welcome and are easy to apply. This means, be it a fair or medium credit limit, individuals need not be worried about.
  • Monthly reporting to all three major types of credit reporting agencies.
  • There is an opportunity to upgrade to an unsecured credit card after 6 months.

Cons

  • High annual fees and this makes people move them back. No one wants to pay higher charges annually for cards. 
  • There are no rewards offered which is quite disappointing and it makes people not adopt the one.
  • Charges a foreign transaction fee which is high.
  • It offers no reward point facility

  • First Progress Platinum Elite Mastercard® Secured Credit Card

One of another good options among prepaid cards is the First Progress Platinum Elite Mastercard® Secured Credit Card. This means if you have a bad credit score then you can get ahead of it.

Comes with a mobile app so that it becomes easier for users to get real-time access anytime. This means, all you need is to get yourself registered and you will be able to monitor every activity of yours.

On the other hand, the ongoing credit monitoring is powered by Experian.

Pros

  • There is no credit history required or we can say score to become an eligible partner with First Progress Platinum Elite Mastercard® Secured Credit Card
  • There will be monthly reporting to all of the 3 major credit reporting agencies.
  • Cardholders will get an opportunity to upgrade their card after 6 months of use.

Cons

  • At the time to attain this type of card, is security money required. This can be higher and make people feel not to go with it.
  • There are no rewards offered which is a major disadvantage.
  • late charges can go up to $41.

Eligibility

  • Must deposit a security deposit of $200
  • Must be a U.S. citizen
  • Must have a social security number.

  • Applied Bank Secured Visa® Gold Preferred® Credit Card

Individuals who are constantly worried whether they will be eligible for any type of card or not then here is the solution. If you are not able to get hold of any credit card then look for prepaid ones. They do not come with tons of procedures, simply you need to get them loaded and you are done.

Also, this will help users like you to build credit history. So, in future when you are looking to get a card then you won’t have to face any difficulties.

This card comes with a security deposit that will become the initial credit line of your card. It is one of the good options if you are looking for prepaid cards. But comes with no rewards.

Pros

  • Comes with a low APR rate and this is because it is widely circulated in the market.
  • Borrowers who do not have a sufficient credit score to get the best one can also apply for it.
  • There is a fixed APR that indicates that it can change as the interest rate changes.

Cons

  • There will be a need for a security deposit of around $250 to $1000.
  • Comes with an annual fee of around $48.

Eligibility

  • You must be a U.S. citizen and also 18 years and above.

  • OpenSky® Secured Visa® Credit Card

Bad credit is always a problem for everyone who wishes to seek loans or credit cards. The one condition makes everything complicated and also makes individuals hustle. But if you are seeking this problem with prepaid credit cards then you must end your search here.

OpenSky® Secured Visa® Credit Card is one of the cards that is known as a prepaid credit card best for building credit. Even if you do not have a good credit history also you can get ahead with one facility to purchase with a prepaid credit card.

All you need is to loan money to it and get ahead.

Pros

  • To get an OpenSky® Secured Visa® Credit Card there is no need to get a credit check. With a bad credit score, you can become eligible for one facility.
  • You do not have to be worried about your bank account.
  • It comes with simple steps that make up an individual to qualify for the OpenSky® Secured Visa® Credit Card.

Cons

  • Cardholders will have to pay a fee of about $45.
  • A security deposit also needs to be paid of around $200.
  • There is a 3% foreign transaction fee applicable to it.

Eligibility

  • To get this card, all you need is to be above 18 years, a U.S citizen and also must pay a security deposit of around $200

  • Capital One Quicksilver Secured Cash Rewards Credit Card

Last in the category of prepaid credit card to build credit is Capital One Quicksilver Secured Cash Rewards Credit Card. These cards have a big name but come with hefty benefits associated with them. They are quite convenient to use and also makes purchase easy within the credit limit.

This way people do not have to be worried about falling into debt. 

 

Pros

  • No annual fee
  • On every purchase there is a cashback facility of around 1.5%.
  • Offers an initial credit line of around $1,000 depending upon what you deposit to the card.

Cons

  • A security deposit of around $300 is a must.
  • APR is 30.49%
  • Late payment fee penalty is around $40.

Eligibility

  • Must own a social security number, U.S citizenship and deposit security money.

Summary

Prepaid cards are becoming quite popular these days because they come easy and in terms of use. Students or children’s parents can give them to make purchases. This means the card is loaded beforehand, so children will be able to use the amount it has.

In turn, they can be easily used to purchase goods and services at retailers- both online and offline.

Also, they are quite easy to carry and convenient to use. On the other hand, the acceptance of prepaid credit cards varies from country to country as they are accepted everywhere.

This is the major reason why prepaid cards are gaining immense popularity. In the U.S all of the above prepaid cards are in high demand. If you are one of those looking to take the benefit then look above to explore all of them.

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