Will A Prepaid Credit Card Build Credit? 5 Best Prepaid Credit Cards.

Do Prepaid Cards Build Credit?

No. Prepaid credit cards do not build credit history as they do not report transaction or payment history to the credit bureaus. 

What Is a Prepaid Card?

A prepaid credit or debit card (also called a “reloadable card” or “general purpose reloadable (GPR) card”) is a payment card in which you put funds in advance (by deposit, transfer, etc.) and then you use it till the balance runs out. Once empty you have to reload it to use further. 

Technically prepaid cards have nothing to do with credit and are just reloadable cards so they don’t build credit history. 

• You don’t borrow money, instead you use your own funds.
• There is no line of credit, minimum payments or interest.
• Prepaid card issuers don’t report usage or payments.

In short: prepaid credit or debit cards offer convenience and control and don’t build any credit.

Will a Prepaid Credit Card Build Credit?

Let’s dig deeper into why prepaid cards don’t help your credit, and consider exceptions or related products.

Why Prepaid Cards Don’t Build Credit

1. No borrowing or repayment history
   Credit scoring models depend on repayments, timely payments, and credit usage. In a prepaid card you don’t borrow anything, so there is no payment report.
2. Lack of reporting to credit bureaus
   Most prepaid card issuers do not report balances, payments, or usage to the major credit bureaus (Equifax, Experian, TransUnion) as the card doesn’t involve credit risks.
3. Credit scoring models ignore them
   Since there’s no recorded borrowing, repayment or utilization, the bureaus and scoring algorithms treat prepaid accounts as non credit. 

Are There Exceptions or “Hybrid” Cards?

There are few fintechs that have created hybrid or secured credit builder cards that look like prepaid or debit cards but behave like credit cards. These are often called “credit building cards”, “secured cards” or “debit credit hybrids.”

These may:

• Require you to deposit money first (as collateral)
• Auto convert your use into a repayable balance
• Report your payments and balances to credit bureaus

Specifically due to reporting, these hybrid cards can help build credit.

So, when someone says “prepaid credit card that builds credit,” they are referring to one of these credit builder cards.

5 Prepaid (or Credit-Builder) Cards to Build Credit

Here are five cards or services that are “prepaid credit / credit building”. Note: some are hybrids / secured credit builder cards, not pure prepaid cards.

Card / Service	How It Works	Credit Reporting & Key Pros / Cons
Current Build Card	Linked to a Current account; your spending limit is based on your deposits.	Reports to TransUnion. No monthly fee, no hard credit check.
Chime Card	A secured “Credit Builder” card: you move money into a secured account, then use the card.	Reports to all three major bureaus. No interest, no credit check, no annual fees.
Fizz Debit Card	Functions like a debit/prepaid card but repays a balance automatically.	Reports to all three credit bureaus. Has membership fees.
FirstCard	Designed for students who want to build credit. Includes a deposit account for spending limit and a credit account for borrowing	Reports to three major credit bureaus
Kikoff	Offers a secured card-like product; you make purchases and payments that are reported.	Reports to credit bureaus. It behaves “like a debit card, with credit perks.”

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