Difference: Between A Credit Card And A Prepaid Card

April 1, 2024 By: Eliyah A. - CreditMonarch Online Writer01 comments

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A credit card is a payment card issued by a bank that permits the cardholder to borrow money up to a specified limit for purchases in stores or online. Payment for the purchases can be made over time, with payment due dates and interest charges being taken into account. Credit cards have the ability to help you build your credit and increase your purchasing power, while also providing you with the greatest protection from fraud liability and rewards perks.  Keep in mind not everyone can be approved for a credit card.

A prepaid card is different because it requires you to load it with cash in advance and only spend what is on it. Expenses on a prepaid card are deducted from your card balance instead of your bank account. The card has a spending limit determined by the amount you load or ‘prepay’ onto it. The fact that prepaid cards don’t require a bank account is why they are appealing to individuals who are unable to access traditional banking.

If you are interested in either a credit card or a prepaid card, we have recommended some below. Each card has there own set of benefits, depending on your preference.

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