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![[Post New]](/forum/templates/default/images/icon_minipost_new.gif) 12/23/2008
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creditrookie
Joined: 12/23/2008
Messages: 2
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I'm confused and am trying to figure out if i should get a prepaid debit card or if a secured credit card would be a better option.... What exactly is the difference? And which one would be better for my credit?
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![[Post New]](/forum/templates/default/images/icon_minipost_new.gif) 12/23/2008
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Igor
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Joined: 12/19/2008
Messages: 24
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That is an excellent question. There are similarities and differences between two. A question you should ask yourself is what is the purpose of the card? If you are trying to establish credit or rebuild your credit, I recommend opening a secured credit card. A secured credit card requires a security deposit that is placed in a savings account. This amount acts as collateral for your line of credit. Secured credit cards are easier to obtain than standard credit accounts and are helpful for borrowers who want to improve or build their credit standing. Secured cards report to the credit bureaus and work just like regular credit cards.You need a minimum security deposit of $200 when you apply.
If the the answer is having a flexibility of using "plastic" AND building credit at the same time, then secured credit card is a way to go.
If you say i just want to use my card and have a flexibility of the direct deposit , a virtual banking access and a bill pay, well, a prepaid debit card is what you need. Please keep in mind , prepaid debit cards DO NOT report to three credit agencies and will do virtually nothing to improve or build your credit.
I hope this answers your question.
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Igor | Credit.com Team Member |
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![[Post New]](/forum/templates/default/images/icon_minipost_new.gif) 01/05/2009
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GerriDetweiler
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Joined: 12/15/2008
Messages: 254
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Igor is exactly right. And there is one more consideration. Credit cards give you additional protection in the case of a purchase dispute. If you buy something and it's not delivered as agreed, wrong amount, etc, you can dispute the purchase in writing before you pay the bill. If you used a debit card it's like using a cash or check.
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Gerri Detweiler
Credit Advisor, Credit.com
Co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights |
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