Credit cards are often the dreaded last resort in times of financial woe, they are seen as the problem behind credit issues rather than the solution. People often blame a large proportion of debt on the fact they had a credit card rather than realising that they aren’t in control of their money and are blaming their debt on something, which they are actually responsible for.

Credit cards can actually be the quick answer to money problems such as a poor credit rating or a need for an increase in income, which isn’t available any other way.

The important decision to make when thinking about a credit card is which type to apply for, a secured credit card or a prepaid card. Either can be appropriate depending on the situation you are in and why the credit card is needed. But for most people the secure card is a far better idea and below is why you should choose a secured credit card over a prepaid credit card.

Secured vs. Prepaid

The secured version of the credit card is ideal when you are low on personal funds and need to borrow money without the hassle of having to take out a loan. They also give you the freedom to spend without having to worry about constantly topping up the card with your own money.

They have the ability to improve a credit rating regardless of how bad the report may be. Simply by borrowing through a credit card and repaying the money you will gradually improve your credit score and indicate to lenders that you are a good lending prospect.

Identity fraud is something that happens and all too often and if it should happen to you through your credit card you will not be liable to repay the money taken. Nor will you be out of pocket like you would be if you were using a prepaid card.

The prepaid credit card is simply a version of a bank or debit card. It is still your money that you simply pay into another account which allows you to use the card. If you are going to use a prepaid card why not just use a bank account rather than incurring interest and fees? The fees, which are required to use the prepaid card, are high and your money doesn’t earn interest the way it would in a bank account.

Transactions are also limited and you are unable to make certain payments to different stores and retailers, which restricts your spending ability even though it is your money that you are using.

Whichever card you opt for you need to make sure that it is the right one for you and more people are choosing the secured card as it simply has so many benefits especially in terms of credit rating and financial borrowing.

This article was written by Amanda Walters, an experienced freelance writer and regular contributor to Huffington Post. Follow her here: @Amanda_W84

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Written by brandyellen

NH Mama loving life. Co-Author (w/ my daughter) of Positive Girl - The Power of Your Thoughts. Fueled by coffee, great convos & optimistic thoughts! Brandy Ellen, Virtual Assistant is a work from home entrepreneur. Question about this post or something found within it? Read my Disclosure Policy as well as Terms of Use.