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The Difference Between Canadian Prepaid Credit Cards and Canadian Secured Credit CardsCanadian Prepaid Credit Cardscan be used much like a regular credit card in the sense that youdon’t need to bring cash to make a purchase. These cards usually have a Visa or Mastercard logoon them so they can be used to buy goods or pay for things at merchants and establishmentswhere credit card payments are accepted. A prepaid credit card can also be used to shop from theinternet. What makes it different from a secured credit card?
What are Prepaid Credit Cards?
Providers of prepaid credit cards do not check credit history. Regardless of your credit rating,you can apply for a prepaid card and get approved with no questions. However, prepaid cardcompanies don’t include credit reporting to the major credit bureaus (Equifax Canada or TransUnion Canada). Therefore, if you want to build your credit history, a prepaid card may not be the best tool to help you.A prepaid credit card is not attached to your bank savings account either. In order to use the card,you must first deposit funds to your prepaid card. If you put $300 in your prepaid account, youcan use the card as long as you have a remaining fund enough to make another purchase.Whenever you’ve used up your balance, you’ll need to deposit cash again before using it.The good thing about using a prepaid credit card is that it eliminates the risk of bad debt. Sinceyour purchases will be paid using the cash you’ve deposited in your card, there’s no need tosubmit your payment at a later time. Also, you will not incur any interest rate or additionalcharges. 
What are Secured Credit Cards?
As a secured credit card holder, you can enjoy a credit line like all other credit card holders. Thismeans, you can charge purchases to your card and pay for them at a later time as long as youdon’t exceed your credit limit. You are also given a grace period- or a period of time where youcan pay off your balances without being charged with additional interest costs.Consequently, if you fail to pay your balances in full within your repayment period or if youchoose to carry over your balance for the next month, you will incur the interest rate cost in your account.Secured credit card holders are also required to submit a security deposit in their accounts. Theamount of your deposit will often determine the value of your credit limit. Nevertheless thereare credit cards for bad credit that offer credit lines that are slightly higher than the requiredsecurity deposit.Many people choose to get a secured credit card because of their poor credit history. If you livein Canada, check your credit report and see if you’ll qualify for Canadian credit cardsthatrequire excellent or good credit. If not, you can consider getting aCanadian secured credit card instead.
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