Prepaid debit cards are a popular option for digitizing cash in today’s digital-first economy. You simply load funds to the card, then use the card for making purchases online or in-store. This allows you to make payments via card without a traditional bank account or a high-interest credit card. But what if you’re actively trying to improve your credit score? Do prepaid cards build credit?
Unfortunately, no, you can’t use a prepaid debit card to boost your credit score.[1] However, the good news is that there are options for building credit that work similarly to prepaid cards. In fact, using a secured credit card is one of the easiest ways to build credit. Read on to learn how to build credit fast using secured credit cards, how to get a secured card, and why prepaid debit cards don’t affect your credit. We’ll also explore a few alternatives in case secured credit cards aren’t the right option for you.
Why prepaid debit cards don't build credit
Prepaid debit cards don’t affect your credit score because they don’t involve borrowing and repaying money.
With prepaid cards, you load your own funds onto the card, so when you use the card to make purchases or payments, you’re spending your own money (not borrowed money that you would spend when using a credit card). This means your prepaid card spending is not reported to the three credit bureaus (Experian, Equifax, and TransUnion) that track credit scores.
You can think of prepaid cards as spending tools, not credit-building solutions.
How credit building really works
Your credit score is based on loans and credit lines that are reported to the credit bureaus, including:[2]
- Store credit cards that work only at specific retailers (like the Amazon Prime Rewards Visa, Target RedCard, or Macy’s Card)
- Credit cards that can be used broadly (like general Visa, Mastercard, or American Express credit cards)
- Student loans
- Auto loans
- Home mortgage loans
- Personal loans
- Secured credit cards
The company that issues the loan or credit line reports the information to the credit bureaus so they can document the debt. Then, the company reports the payments you make (or fail to make) to the credit bureaus as well.
This information is used to calculate your credit score, which is always changing to reflect new information provided by your creditors. Generally, as you use credit responsibly and repay your debts on time, your score increases. If you miss payments or regularly make payments late, your score could go down.[3]
Building good credit is extremely important because your score could determine if you qualify for a new loan, an apartment, or even a job (some jobs require a credit check).[4] Just as importantly, your score is a factor in determining the interest rate lenders can offer you.[4] If you ever borrow money to buy a car or a home, a favorable interest rate can save you a lot of money.
Using secured credit cards to build credit
The problem with using loans and credit cards to build credit is that they often require you to have an established credit score. So, how do you start building credit so you can qualify for credit cards and loans?
This is where secured credit cards come in handy.
With a secured credit card, you place a refundable security deposit with the card issuer. The credit limit on the card typically matches the amount of your deposit. So, you can spend up to that amount, then pay it off, just like a normal credit card.
For example, if you get a secured credit card with a $500 deposit, you can spend up to $500, then repay it all at once or in installment payments over time (paying the credit card bill in full each month can help you avoid interest expenses). Your payments and the card balance are reported to the credit bureaus, so on-time payments can help build your credit quickly.[5] And, just like a normal credit card, secured cards represent revolvingcredit lines, meaning you can borrow and repay over and over.
If you fail to repay your balance, the creditor can take the amount owed from your deposit. Having this deposit as collateral reduces the risk for the creditor, which is what allows them to issue a secured credit card to borrowers with no credit or poor credit.
Some secured cards graduateto an unsecured card at a certain point, allowing you to recover your deposit and continue using the card without collateral.
Quick tip: You can improve the credit utilization factor of your credit score by keeping your balance below 30% of the credit limit.[6] So, if you have a secured card with a $500 limit, keeping your debt balance below $150 is a good credit-building habit.
Secured card vs. prepaid card
To reiterate, secured cards and prepaid cards both limit your spending to an amount that you place upfront. But while prepaid cards use the funds placed upfront to cover each expense paid by the card, secured credit cards use the upfront funds as a deposit.
With prepaid cards, you load funds1, then spend. With secured cards, you spend, then repay, while having a deposit on file as collateral.
Best secured credit card options
There are many reputable secured credit card options. Here are some of the most popular:
Discover It Secured Credit Card
The Discover It Secured Credit Card is a good secured credit card for beginners. The minimum deposit required is $200, but you can go up to $2,500 in $100 increments if you want a higher credit limit. After six months of on-time payments, you’re eligible to get your deposit back and graduate to an unsecured card status.
- Annual fee: $0
- Minimum required deposit: $200
- APR: 27.24%
- Rewards: 2% back at gas stations and restaurants, 1% back on other purchases, 2x cash back match at the end of the first year
Platinum Secured Credit Card from Capital One
The Platinum Secured Credit Card from Capital One is a low-deposit secured credit card, with deposits starting at just $49 for qualified borrowers with some established credit. Unlike most cards, which automatically match the deposit amount to the credit limit, this card offers a $200 credit line with a deposit of $49, $99, or $200, depending on your current credit. You can increase the line up to $1,000 by making a higher deposit. Your usage is automatically reviewed after six months to see if you qualify for a higher credit limit and/or return of your deposit.
- Annual fee: $0
- Minimum required deposit: $49-$200, depending on your current credit
- APR: 29.74%
- Rewards: None
Quicksilver Secured from Capital One
The Quicksilver Secured from Capital One offers cash-back rewards and a limit of up to $3,000 for qualified borrowers (depending on your current score) with higher deposits. With a minimum $200 deposit, this is an accessible card. After six months, your account is automatically reviewed to see if you qualify for a higher credit limit without increasing your deposit.
- Annual fee: $0
- Minimum required deposit: $200
- APR: 29.74%
- Rewards: 1.5% cash back on all purchases
Note: Information above has been verified as of September 24, 2025.
Alternatives to using a secured credit card to build credit
If a secured credit card isn’t the right fit for you, perhaps because of the required upfront security deposit, there are a few alternative credit-building options to consider:
- Credit builder loans. With this financial tool, you get a loan, but you don’t receive the funds until you pay off the loan. For example, say you get a 12-month $600 credit-builder loan. The funds from the loan are held in an account for you while you make your monthly loan payments (which will likely be more than $50 per month to account for fees and interest). The creditor reports your debt and payments to the credit bureaus all year. At the end of the 12 months, the loan funds are released to you. So you’re essentially building savings and credit at the same time.
- Credit builder apps. Some credit builder apps help the credit bureaus recognize your non-debt-based payments, like rent and utilities.[7] The apps report your on-time recurring payments to the credit bureaus to show that you handle money responsibly, even if you don’t use debt.
- Becoming an authorized user on someone else’s credit card. If you can convince someone with a long-standing, responsibly managed credit card account to add you to their account as an authorized user, that account can show up on your credit report, boosting your score.[8]
Start building good credit today
While prepaid debit cards don’t affect your credit score, secured credit cards provide a path to building good credit quickly. If you don’t have enough money available to make the required deposit to open a secured credit card, consider making smaller monthly payments toward a credit builder loan, which can improve your credit score while helping you save enough to cover the deposit on a secured credit card.
With a secured credit card, you can build responsible financial habits while boosting your credit score, setting yourself up for future financial success.
1. https://www.experian.com/blogs/ask-experian/do-prepaid-credit-cards-help-credit-scores/
2. https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/building-credit/
3. https://www.usa.gov/credit-score
4. https://www.equifax.com/personal/education/credit/score/articles/-/learn/benefits-of-good-credit/
5. https://www.experian.com/blogs/ask-experian/how-to-use-a-secured-credit-card/
6. https://www.experian.com/blogs/ask-experian/credit-education/score-basics/credit-utilization-rate/
7. https://www.experian.com/credit/score-boost/
8. https://www.nerdwallet.com/article/finance/authorized-user-credit-score
