Prepaid Credit Cards Vs. Secured Credit Cards…

Sometimes people ask if we offer “prepaid credit cards” or “secured credit cards.” The term prepaid credit card is a misnomer because credit card is by definition a loan accessed through a card service – its not prepaid. To confuse matters a little more, people use the term credit card as a universal definition for cards, even if its a debit card, prepaid card or a credit card (see our post about terms for more info). “Secured credit cards” are credit cards that require a security deposit prior to account activation. You provide a security deposit and then borrow against it, while paying the bank fees and/or interest. In essence, you are borrowing money from yourself.

Many secured credit card products are gone now, but if you can find one, the benefit is that the card issuer will help you establish credit history as long as you pay the bill on time. The downfall is that if you need a $25,000 credit line, you have to place $25,000 on deposit, come up with more money to pay a bill at the end of every month after spending AND if you have employees to issue cards to – there are no controls available to limit how they spend through the credit line. Our service is a bit different from anything available for small and medium businesses. You place funds on deposit (like a bank account) in advance of spending but you have direct access to and can use funds at any time. In essence you are self crediting to keep yourself flexible and, you stay in control of how employees use company funds.

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