 TITLE: What Is a Prepaid Card? CONTENT: Do Prepaid Cards Build Credit?\n------------------------------\nAnother difference between prepaid debit cards and credit cards? Prepaid cards will not help you build credit. In this way, they're more like traditional debit cards associated with a bank account. Your payments will not be recorded on your credit report, and your use of the card will not affect your credit score.\nThere may be other reasons to get a prepaid debit card, such as limiting spending, giving a child an allowance or enjoying the convenience of paying with a card rather than cash. But if you have no, poor or fair credit and you'd like your card usage to help improve it, consider an alternative to a prepaid card, such as a secured credit card.\nSecured cards function like a regular credit card, except that you are required to make a deposit, which typically becomes your credit limit. Unlike a prepaid debit card, you can't use that deposit to pay for purchases or your bills; it's essentially a safety net for the lender in case you stop making your card payments. In most cases, the credit card issuer reports your secured card's activity to the credit bureaus, so limiting purchases and paying off your balance in full each month by the due date will help you improve credit. Your secured card's payment history and credit utilization will be reflected on your credit report and score, unlike a prepaid card, and will help you rebuild or establish a credit history. Eventually, you may get your deposit back or be able to transition to an unsecured card. END