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Released: February 17, 2012

Help Desk FAQ

Can a prepaid card help someone build credit?

Because a prepaid card can be used only after you load your own money on to it, it cannot help you build credit. To build credit, you must borrow money and then pay it back, and the creditor must report your payment record to at least one of the three major credit reporting agencies (Equifax, Experian and TransUnion).

If you’re trying to build a credit history but you’re unable to get a traditional, unsecured credit card, consider applying for a secured card. A secured card is a credit card backed by your deposit (typically a few hundred dollars), which is held by the card issuer and used to cover your debt if you don’t repay the money you owe. Most of these cards report to one or more of the three major credit reporting agencies. Eventually, if you have made all your payments and managed your secured card responsibly, you could qualify for an unsecured card. (You can get your secured card deposit back after you have paid off any balance and closed the account.)