Q&A: Is a Secured Credit Card Essentially just a Debit Card?

Comment for Q&A: Is a Secured Credit Card Essentially just a Debit Card?

1. MOM KNOWS EVERYTHING // June 17th, 2012 at 12:32 pm
   

   It works like a debit card in that there must be money on the account to cover your “charges”; but the people you give it to won’t know it isn’t a regular credit card. As they process it, it will go through like a credit card transaction.

2. Scott // June 17th, 2012 at 1:15 pm
   

   Yes.

   A secure credit card is NOT the same as a debit card.

   A secured credit card is a LINE OF CREDIT that is extended to you by a bank which you have established a security deposit with. This protects the bank in the event that you don’t pay your bill.

   A debit card pays directly out of your checking account.

   Rental car agencies which do not accept debit cards would typically accept your secured card, but be aware that they’ll try to authorize a large amount ($ 500?) on your card, and even if your rental only costs $ 60, the other $ 440 won’t be available for up to ten business days.

   Alamo and Budget accept Debit Cards for payment.

3. Texas M.B.A. // June 17th, 2012 at 1:46 pm
   

   A secured credit card is somewhat like a debit card since you basically “deposit” money into the credit card issuers bank, and money comes out with every purchase you make. It does, unlike debit cards, have some credit card priviledges like buyers assurance and warrantees, etc.

4. Smoovy Loco // June 17th, 2012 at 2:08 pm
   

   They will recognize it as a CREDIT card. You pay interest and a monthly payment on it just like you would a regular credit card. It reports to all 3 agencies as well. The only difference between that and a normal credit card is that the security deposit determines your credit line, which you could use to your benefit. By adding to your security deposit, you can increase your credit line, something you can’t do with a credit card.

   Debit cards are backed by your money and your money alone. There’s no credit limit. Once you swipe a debit card, that money’s spent. You don’t pay interest, you don’t have to pay it back.

5. smarttrader101 // June 17th, 2012 at 2:59 pm
   

   The secured credit card will help restore your credit and it will be considered as a regular credit card and not a debit card.