I figured I'd make this easy chart comparing the three, since my website talks a lot about all of them:
|
|
Traditional Credit Cards |
Secured Cards |
Prepaid Reloadable Cards |
|
Fees |
Usually $0, like the |
$0 to $59/year |
As low as $6.95/year |
|
Depends On Credit Rating |
Yes |
No |
No (but can be used to verify identity) |
|
Helps rebuild credit rating |
Yes |
Yes |
No |
|
Easy of Getting |
Can be difficult |
Easy |
Very Easy |
|
Ease of renting hotels/cars |
Easy |
Easy |
Can be difficult, call ahead |
|
Lets you spend money you don't have |
Yes |
No |
No |
|
Dumb Fees for going overlimit |
Yes, but check this out |
Yes, but check this out |
Yes, but check this out |
|
Requires Up-front $$$ |
No |
Yes, and it may be difficult to get back without cancelling |
Yes, but easy to get back, just spend it |
|
Safer than Debit? (check card agreement for details) |
Yes |
Yes |
Yes |
|
Usable for Online Purchases? |
Yes |
Yes |
Could be problematic |
|
Organization Req'd? |
Need to pay monthly bill |
Need to pay monthly bill |
Not a lot |
other factors to compare
1. How private is it? Does the issuer require you (in the fine print) to allow them to share your personal and financial details with other companies, credit bureaus, law enforcement (without a warrant) etc?
2. How useful are they in the USA and further (overseas, e.g. Europe, Asia, third world?)
3. What is the foreign exchange rate (compare any one day's rate between all cards)?
4. What is the FXS surcharge? The most common one I see on gift debit cards is 2.5%. I continue to search for a card that has a lower surcharge. How do credit cards and prepaid credit cards compare? Imagine most of your online purchases are from companies. This is going to be a substantial add-on total over the year.
5. Is your SIN required? Privacy laws in Canada don't mean much as one often has to 'sign off' in order to do business.
6. Can you challenge the transactions? What are the terms of doing so, and success rates of such actions?
Correction: Imagine most of
Correction: Imagine most of your online purchases are going to be from companies IN THE USA, and your card is denominated in US dollars.
Bank of America Secure Card
I had no problem getting a secure BofA credit card. However, I thought it was too good to be true. The bank agent told me there's no annual fee or other hidden fees. I simply had to preload $300-1000 into the card to build my credit for the next six months. What they didn't tell me is that a month into using this card there's an annual fee taken from my initial deposit of 'self' credit. What is this fee all about? What is the value when I have already put in a good chuck of money to build my own credit? The Americans are pretty crafty when it comes to making money off of you. In Canada, the lowest credit I've ever started with was $500 and that was given me when I was in my student days. In the US, you still have to cough up your own dough. I called the VISA department of BofA and they said there's nothing they can do to waive the fees. They deferred me to call the local bank branch. Well, the bank branch didn't want to do anything with me so they tried to send me back to the VISA department. I am pretty big on service and I couldn't believe what's happened. SO I called back BofA's VISA department to cancel the card. And guess what? When I was cancelling it they told me there IS something they could have done for me since I was misinformed from the beginning but it was already too late. From reading your blog, I now see that there are other banks who are willing to work with Canadians I am going to go for a stroll.
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