2017 RANKING & REVIEWS
BEST PREPAID CREDIT CARDS
Make the Most of Prepaid Credit Cards
Is your credit history riddled with blemishes, or does it barely exist at all? Lenders and banks aren’t exactly in a hurry to hand out unsecured credit cards to individuals who haven’t proven their creditworthiness over time. However, they do have another option that can be appealing: prepaid credit cards.
By applying for the best prepaid credit card, you can find a credit line that allows you to practice and demonstrate responsible borrowing and money management. With a prepaid credit card, you’ll be able to begin sending your activity to credit reporting agencies and building up your credit score in no time at all.
Award Emblem: Top 6 Best Prepaid Credit Cards
Borrowing money through even the best prepaid credit cards requires diligent planning and money management on your part. The lender has the ability to use your deposit as collateral, but you could be damaging your credit score without timely repayment.
AdvisoryHQ has compiled this list of our top six best prepaid credit card choices on today’s market. Whether you’re looking for free prepaid credit cards or ones that feature rewards programs, we’re certain that one of these options will be the right fit for your wallet.
AdvisoryHQ’s List of the Top 6 Best Prepaid Credit Cards
List is sorted alphabetically (click any of the credit card names below to go directly to the detailed review section for that credit card):
- BankAmericard® Secured Credit Card
- Citi® Secured MasterCard®
- Commerce Bank Secured Visa® Credit Card
- Discover it® Secured Credit Card
- nRewards® Secured Credit Card
- Capital One® Secured MasterCard®
Top 6 Best Prepaid Credit Cards| Brief Comparison & Ranking
Credit Card Names
Bank Americard® Secured Credit Card
Citi® Secured MasterCard®
Commerce Bank Secured Visa® Credit Card
Discover it® Secured Credit Card
nRewards® Secured Credit Card
Capital One® Secured MasterCard®
Table: Top 6 Best Prepaid Credit Cards | Above list is sorted alphabetically
What Is a Prepaid Credit Card?
What is a prepaid credit card, exactly? Knowing the fundamental difference between our best prepaid credit card options and a traditional credit card is key to understanding why these are a beneficial addition to your finances. Prepaid credit cards, often referred to as secured credit cards, give consumers a chance to “practice” with plastic under an environment controlled by the lender.
Essentially, a lender wants some sort of guarantee that a borrower who has little to no history of borrowing is going to repay his or her line of credit. To make sure that the lender has some recourse if you don’t do this, he or she will require a deposit upfront. This deposit is held either indefinitely or for a set period of time until the lender is positive that you are creditworthy enough to responsibly repay any debt that you may incur.
Oftentimes, the deposit on your prepaid credit cards is going to be equal to the amount you’re granted on a line of credit. For example, if you make a $200 deposit, you will receive a $200 available credit line.
Many of the best prepaid credit cards do provide the opportunity for you to make larger deposits and have a larger line of credit as a result. However, for many people, making deposits that range into the thousands of dollars can be cost-prohibitive.
Even a small credit line used responsibly for a long period of time can make a big impact on your credit score.
Qualifying for a Prepaid Credit Card
Answering the question, “What is a prepaid credit card?” is the first step towards making the most of this type of card. The next step is to consider which of the best prepaid credit cards may be right for you.
What do you need to consider before you begin applying for any of the best prepaid credit card options? Like any big financial decision, you need to think through all of the possible scenarios and ask yourself a few questions. We’ve compiled this list of considerations to keep in mind as you read through the reviews on our ranking of the best prepaid credit cards:
- How much can you afford to put down as a deposit?
- Is a rewards program significant to you? Depending on the program, would you spend enough money on this card to gain any of the rewards?
- What kind of advantages would you expect a prepaid credit card to offer?
- What is the annual fee, and can you afford it in addition to your deposit?
- Is the interest rate competitive or manageable with the amount of spending you intend to do on this card?
Asking yourself these questions is a great way to consider which of the best prepaid credit card choices is going to be the right fit for you. These considerations center on affordability as well as some of the perks and advantages that may be important to you as an individual.
AdvisoryHQ’s Selection Methodology
What methodology does AdvisoryHQ use in selecting and finalizing the credit cards, financial products, firms, services, and products that are ranked on its various top rated lists?
Please click here “AdvisoryHQ’s Ranking Methodologies” for a detailed review of AdvisoryHQ’s selection methodologies for ranking top rated credit cards, financial accounts, firms, products, and services.
Detailed Review – Top Ranking Best Prepaid Credit Cards
Below, please find the detailed review of each credit card on our list of prepaid credit cards. We have highlighted some of the factors that allowed these prepaid credit cards that build credit to score so high in our selection ranking.
BankAmericard® Secured Credit Card Review
If you aren’t keen on signing up for an online prepaid credit card, you can take advantage of the BankAmericard Secured Credit Card. You’ll get all the benefits of being able to bank online with the backing of a financial institution that is likely to already be in your neighborhood.
Those who know they need prepaid credit cards that build credit but want the option of a higher spending limit may prefer this BankAmericard® Secured Credit Card. Flexibility is high with your account balances, requiring no more than $300 to open the secured prepaid credit card line. However, you can also put down a deposit of up to $4,900 in order to increase your credit limit.
After one full year, your credit history will be evaluated to determine whether or not you qualify to have your deposit returned. This prepaid credit card to build credit acknowledges that you’re working hard and honors refunding your security deposit if you prove yourself to be creditworthy.
Rates and Fees
For a small annual fee of just $39, the BankAmericard® Secured Credit Card is easily a great contender for the best prepaid credit card. It features a standard variable APR of 20.49 percent, with a balance transfer fee of 3 percent (or a minimum of $10).
However, you’ll also receive a host of other services for the fees you pay on its pre paid credit cards:
- Online and text message banking
- $0 liability guarantee on fraudulent transactions
- Overdraft protection
- Account alerts
- Online shopping security (featuring digital wallet technology)
Citi® Secured MasterCard® Review
If you’re searching for free prepaid credit cards, the Citi® Secured MasterCard® could be a contender for you. In addition to an excellent prepaid credit card to build credit, you’ll also receive benefits like travel accident insurance, worldwide car rental insurance, trip cancellation protection, and identity theft solutions.
Source: Citi® Secured MasterCard®
One of the top prepaid credit cards to build credit, the Citi Secured MasterCard offers a range of potential account balances to suit most individuals. One of its better features that makes it an attractive choice among prepaid credit cards is its low account minimum. At just $200, you can be approved and open an account with the Citi Secured MasterCard. You also have the option of depositing up to $2,500 (a low maximum in comparison to some of the other best prepaid credit cards).
Citi will hold that collateral deposit in a separate account that does not bear interest. The holding period is slightly longer than the BankAmericard Secured MasterCard, at eighteen months, but it is still a great choice for prepaid credit cards that build credit.
Rates and Fees
There is no annual fee associated with the Citi Secured MasterCard, making it one of the best prepaid credit cards available. The interest rate is slightly higher than some prepaid credit cards that build credit, but consider these rates:
- 22.24% standard variable APR on all purchases and for balance transfers completed in the first two months
- 25.49% APR for cash advances
- 29.99% penalty APR
Commerce Bank Secured Visa® Credit Card Review
Selected to rank as one of the best prepaid credit cards, the Commerce Bank Secured Visa® offers a flexible choice for consumers who want plenty of perks, low interest rates, and a potentially higher line of credit on their online prepaid credit card.
Source: Commerce Bank Secured Visa®
The Commerce Bank Secured Visa is ideal for consumers who are looking for the best prepaid credit card with a slightly higher minimum. You’ll be required to put down a minimum of $400 as a collateral deposit for an equal line of credit. Of course, you can also deposit up to $5,000 for more spending power on this best prepaid credit card.
You’ll also receive a host of additional benefits, including:
- FICO credit score monitoring
- Online statements
- Overdraft protection
- Travel accident insurance
- Zero liability coverage
- Auto rental collision damage waiver
Fees and Rates
When compared to some of the best prepaid credit cards, the interest rates on the Commerce Bank Secured Visa are relatively low. It features a standard variable APR of 18.49 percent, easily dipping below interest rates in their low twenties associated with the Bank of America and Citi prepaid credit cards reviewed above.
Unfortunately, there is a downside to the cost of the Commerce Secured Visa when it comes to its annual fee. While most of the best prepaid credit card choices on our ranking of the top prepaid credit cards to build credit will have no annual fee, this one charges $49 each year.
Discover it® Secured Credit Card Review
Not many prepaid credit cards come with a detailed rewards program like this Discover it® Secured Credit Card. Pre paid credit cards like this one are modeled off its successful unsecured counterparts, offering 1 percent cash back on all purchases and 2 percent cash back at restaurants and gas stations on this prepaid credit card with no fees.
Source: Discover it® Secured Credit Card
Open a small line of credit on a prepaid credit card with the Discover it Secured Credit Card. You’ll find that depositing the minimum required $200 should be a breeze, and you can always adjust your line of credit up to $2,500 with an equal deposit.
With prepaid credit cards to build credit, you’ll understand just how important it is to have your account evaluated on a regular basis. After the first year of maintaining your account in good standing, you may be eligible to have your collateral deposit refunded, moving this from one of the best prepaid credit cards to a great unsecured line of credit. In this way, you can use this as a prepaid credit card to build credit and continue that pattern into the future with more freedom.
Fees and Interest Rates
If you’re searching for prepaid credit cards with no fees and plenty of perks, this Discover it Secured Credit Card may be the fit for you. Featuring no annual fee, you’ll also find a very low introductory rate for balance transfers. For those completed by February 10, 2017, you’ll receive a 10.99 percent APR for the first six months.
Other than this small introductory period, purchases and balance transfers are subject to a higher-than-average interest rate at 23.24 percent. While it is certainly still competitive compared to other best prepaid credit card choices, it is pushing the upper limits.
nRewards® Secured Credit Card Review
Consumers who qualify for an account at Navy Federal Credit Union (members of the armed forces, Department of Defense employees, and their families) will love this best prepaid credit card choice. You get the backing of a large financial institution, a prepaid credit card to build credit, and a rewards program with low interest rates.
Source: nRewards® Secured Credit Card
The downside to the free prepaid credit cards offered through the nRewards® Secured Credit Card program is the high initial deposit required. Prepaid credit cards, such as those from Bank of America or Discover, require relatively low minimums, but the nRewards Secured Credit Card comes with a minimum $500 deposit to be held in a savings account as collateral.
However, you do get the added perk of a rewards program that scores you one point for each dollar you spend, redeemable for gift cards and merchandise.
Fees and Interest Rates
What exactly is it that allowed us to rank the nRewards Secured Credit Card as one of the best prepaid credit cards you’ll find? Other than its generous rewards system, it truly does feature some of the absolute lowest interest rates on a prepaid credit card.
In comparison to many of the best prepaid card choices that feature interest rates in the low twenties, the nRewards best prepaid credit card has variable interest rates from 9.24 to 18 percent depending on your creditworthiness.
Not only that, but it also has no annual fee, giving it the advantage of both low interest rates as well as making it one of the top free prepaid credit cards.
Capital One® Secured MasterCard® Review
Take advantage of low required deposits and a faster way to build up to an unsecured credit card with this Secured MasterCard from Capital One. Easily one of the best prepaid credit cards, this offering gives flexibility on deposits and has no annual fee.
Source: Capital One® Secured MasterCard®
What makes the Secured MasterCard from Capital One of the best prepaid credit cards? It has some flexibility on account deposits depending on your creditworthiness. Deposits will range from $49 to $200 for an initial credit line. Your initial deposit for this prepaid card can be paid up front or on a payment plan over time, but the account won’t be opened until it is paid in full.
Depositing more will score you a higher line of credit with this online prepaid credit card, up to $3,000.
What really sets this apart as a best prepaid credit card option is its timeline. After five months of responsible use, you may be eligible for a higher line of credit without making any additional deposits. This is a great transition for prepaid credit cards that build credit.
Rates and Fees
You will see some of the highest interest rates among our selection of the top prepaid credit cards with this Secured MasterCard from Capital One. Consumers are subject to a standard variable APR of 24.99 percent – competitive but still on the high side.
Beyond this piece of information, which is well-noted, you will find that it is one of the free prepaid credit cards with no annual fee. You’ll also receive unlimited access to your credit score to help you continue to build your credit over time.
Conclusion—Top 6 Best Prepaid Credit Cards
The right prepaid credit card can help you to build up or repair your credit, sometimes in a relatively short period of time. Whether you have bad credit or simply no credit at all, lenders may not be knocking at your door to issue you a line of credit. With pre paid credit cards, you can find a way to begin building your credit score back up while giving lenders confidence and collateral in case you default on your payments.
Image source: Pixabay
Using one of the best prepaid credit cards should be good practice, hopefully building you up to receiving an unsecured credit card with a higher credit line. Take advantage of these offers that automatically move you over to an unsecured credit line if you become eligible after a given time frame.
These prepaid credit cards that build credit can be a great addition to your wallet. We think you’ll find this ranking of the best prepaid credit choices helpful as you begin to think about your financial future. After all, building your credit now has some serious advantages for the future.
AdvisoryHQ (AHQ) Disclaimer: Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info. Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.