To find out how Canadian secured credit cards differ from their prepaid counterparts, let’s consider the features of each card program, separately.
What are Canadian Secured Credit Cards, Exactly?
As their names suggest, secured credit cards will always carry security deposit requirements. This feature does not only guarantee the repayment of your future credit card charges. It also helps determine the spending limit or cap that will be imposed on your transactions. Some programs may let you use 50% of the amount you have initially deposited, whereas others may allow you to use as much as 100% to 200% of the cash-deposit you have made with the issuer. Still, you should remember never to spend beyond such limit. Otherwise, you will surely incur pesky fees and charges, in the form of overdraft fines and declined transaction penalties.
Canadian secured credit cardholders are advised to submit on-time and complete payments of their monthly bills. This way, they can avoid incurring huge interest charges as well as late payment penalties which could potentially hurt, not just their personal finances, but even their credit history. After all, issuers of such lines of credit often submit timely reports of consumer activities to the two major credit bureaus in the Great White North, namely Equifax Canada and TransUnion Canada.
Suppose you have poor credit. Will your poor credit standing get in your way of qualifying for a Canadian secured credit card? Not at all! In fact, consumers are advised to apply for these lines of credit to gradually rebuild their credit history. After all, a lot of consumers can attest to the fact that secured cards are among the best tools that can pave the way towards regaining a consumer’s good- to excellent credit standing. This means that if you wish to cause dramatic improvements to your credit history, we suggest you apply for this credit program, right away. And we guarantee that with responsible credit and payment habits, you can successfully rehabilitate your credit profile.
The Basic Features of Canadian Prepaid Credit Cards
Just like Canadian secured credit cards, prepaid credit cards also require initial cash-outs from prospective cardholders, like you. This requirement helps determine the amount of cash you can actually use on your account, especially for covering your bills, purchases and other expenses. In case the funds run low, you can simply deposit cash on your card so that you can continuously use it when shopping in your favorite stores or when transacting deals, online.
It is also worth mentioning that prepaid credit cards can prevent cardholders from incurring not just bad debts, but even interest fees, and other transaction-related charges – an excellent deal indeed!
A gentle reminder though. Most Canadian prepaid credit card issuers do not offer credit reporting services. In fact, the transactions you will make with your prepaid account won’t be reflected in your credit history. And this is one of the main reasons why most consumers in Canada decide to take out and manage secured credit cards over their prepaid counterparts, most especially those who wish to jumpstart or rebuild their respective credit profiles.
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