Many individuals assume {that a} pay as you go Visa card is identical factor as a secured Visa credit card. This really could not be farther from the reality. A pay as you go Visa credit card is considerably totally different from a secured Visa credit card. Listed below are 5 explanation why flat rate merchant account pricing.
1. The Credit Issue
Should you’re making an attempt to determine between a pay as you go credit card or a secured Visa credit card, chances are high that your credit is not precisely spotless. If you wish to enhance your credit score, understanding the variations between pay as you go cards and secured cards is essential.
Should you go for a pay as you go credit card, you are not doing something to enhance your credit score. It’s because pay as you go credit cards usually aren’t reported to the credit bureaus. However, when you’re issued a secured Visa credit card, your account exercise is reported to the credit bureaus, bettering your credit.
By managing your secured Visa credit card correctly, you are not simply having access to a credit card and the advantages that go together with carrying one, however you are additionally growing your credit rating and rebuilding your credit historical past.
2. The Cash Issue
There may be one factor that pay as you go credit cards and secured credit cards have in widespread. Whether or not you open a secured credit card or a pay as you go credit card, you are going to should ship in cash. That, nonetheless, is the place the similarity ends.
While you give cash to a pay as you go credit card firm, they credit the quantity to your pay as you go card after which you possibly can spend the cash you have placed on it. That is it — finish of story. When all the cash is spent, you both add extra or throw the card away.
While you ship in cash to open your secured Visa credit card account, the cash is put right into a financial savings account and also you earn curiosity on that account. Then the credit card firm extends you a revolving line of credit equal to the quantity of that account.
3. Month-to-month Statements
In relation to a pay as you go credit card, there aren’t month-to-month statements to pay. With a secured Visa credit card, nonetheless, you obtain a month-to-month statement that should be paid on time (or it would have an effect on your credit). You should have the selection of paying the minimal quantity due, the stability in full or something in between. This exercise is then reported to the credit bureaus.
4. Resorts and Automobiles
These days whenever you examine right into a lodge they ask you whether or not or not you might be utilizing a pay as you go credit card and lots of lodges and car rental corporations will not even settle for pay as you go credit cards as a type of payment. Nevertheless, there may be nothing differentiating an unsecured credit card from a secured Visa credit card, which implies you should utilize your secured card to e book lodges and car leases with none trouble.
5. Transferring Ahead
Should you carry a pay as you go credit card, there’ll by no means be an opportunity of it evolving to an unsecured credit card. Nevertheless, it’s not unusual for a secured Visa credit card to evolve into an unsecured credit card after getting established a payment historical past and have confirmed you could be trusted with the card.
So whereas a pay as you go credit card could look a bit like a secured Visa credit card, the actual fact stays that they’re very totally different in some ways. If you wish to rebuild your credit, then a secured Visa credit card is admittedly the one technique to go.
