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Contrary to popular opinions, you can rebuild your credit with prepaid credit cards with credit builder feature. As mentioned in our prepaid credit cards page, there are mainly two types of prepaid credit cards. The first type functions mainly like a normal debit card. The second type are prepaid credit cards with credit builder, a service that reports your activity to the major credit bureaus.
What exactly is Credit Builder?
Credit Builder is a service designed to help one build or rebuild their credit. This is how it works : You pay a monthly fee (or rather, the monthly fee is automatically deducted from your bank account). This fee that you pay is reported to the three major credit bureaus every month for twelve months as an interest payment. Within this period, your credit score should have improved and you will be getting offerrs on regular credit cards in the mail. This credit builder feature is an option provided on some prepaid credit cards. We will explore these prepaid credit cards with credit builder features below, compare their fees and features and highlight our recommendations.
Which are the prepaid credit cards with credit builder feature?
There are four (to our present knowledge) prepaid credit cards with credit builder features in them. They are the Eufora Prepaid Mastercard , the Vue Visa Card, the Credit Builder card and the VIP Visa Card. Let us compare these prepaid credit cards with credit builder features.
Fee Comparisons of Prepaid Credit Cards with Credit Builder
Prepaid Credit Cards
with Credit Builder |
Credit Builder Fees |
Credit Bureau Reporting |
| Eufora - Preferred Level |
$6.65 for 12 months |
Transunion |
| Eufora - elite level |
$10.00 for 12 months |
Transunion |
| Credit Builder
|
$$29.95 - $10.00 rebate
Net $19.95 |
Transunion
Experia
Equifax |
| Fee Comparison |
| Fees |
Eufora - Preferred |
Eufora - Elite |
Credit Builder |
| Annual Fee |
$59.95 (only for first year) |
$99.95 (only for first year) |
No annual fee |
| One-time Application Fee |
n.a |
n.a |
n.a |
| One-time Processing Fee |
n.a |
n.a |
$90.00 |
| Monthly Maintanence Fee |
n.a |
n.a |
$4.95 (Holographic Debit Card)
$3.95 (ATM Card)
$8.90 monthly
$106.80 annually |
| Creditbuilder Payments |
$6.65 |
$10.00 |
$29.95 from bank account of which $10.00 will be returned as a credit to your card |
| Card to Card Reload Fee |
n.a |
n.a |
$1.00 |
| Bank Account to Card Reload Fee |
$13.00 |
$13.00 |
$1.00 |
| Direct Deposit Reload Fee |
$1.00 |
$1.00 |
$1.00 |
| Purchase at Merchant Fee |
n.a |
n.a |
$0.50 |
| Purchase Online Fee |
n.a |
n.a |
cannot be used for online purchases |
| ATM Withdrawal Fee |
$2.00 |
$2.00 |
$1.50 |
| Live Teller Fee |
Free |
Free |
$1.50 |
| ATM Balance Inquiry |
$1.00 |
$1.00 |
$1.00 |
Automated Telephone Inquiry/
Service Fee |
$0.50 |
$0.50 |
$0.50 |
| Customer Live Call Fee |
Free |
Free |
$3.00 |
| Paper Statement Fee |
$5.00 |
$5.00 |
$5.00 |
Card replacement/cancellation/
reactivation Fee |
$20.00 |
$20.00 |
$5.00 |
Detailed look at Prepaid Credit Cards with Credit Builder
Eufora Prepaid Mastercard
Our best pick among these prepaid credit cards with credit builder is probably the Eufora™ MasterCard® Card. There are several reasons for this. Firstly, the Eufora Mastercard has lower annual or monthly fees than the other cards. In fact, it has lower annual or monthly fees than most prepaid credit cards. Furthermore, the monthly payments for the credit builder program is lower than the other
cards ($6.65 or $10.00 versus $19.95 for the others).
You might be asking why Eufora has the preferred and elite levels with different annual fees? The reason is that Eufora pays its cardholders a commission each time he or she refers someone to the card. In fact, Eufora actually has a multi-level marketing program which pays cardholders commissions when their down line refers more new referrals. Elite level members earn a higher commission than Preferred members. If you are not interested in referring friends to this card, then getting the card at the preferred level will suit just fine.
The Eufora Prepaid Mastercard also has features that are more common in a typical regular unsecured credit card than a prepaid credit card. It has features like travel insurance, auto insurance, Mastercard zero liability for unauthorized purchases etc. You are also entitled to participate in a monthly auto sweepstake.
The only drawback is that the credit builder program in Eurofa only reports to one of the major three credit bureaus, Transunion.
Credit Builder Card
The Credit Builder has a credit builder service, which for a monthly fee of $29.95 (of which $10.00 is given as a rebate back to you), reports these payments to the three major credit bureaus.
The disadvantage of this card over the VIP Visa Card is that
it is not a Visa or Mastercard. Though you can use them at merchants that accept debit card payments, which actually includes most merchants these days, the places where you can use this is more limited. You also cannot use the card for online purchases.
Are Prepaid Credit Cards with Credit Builder Right for you?
Prepaid Credit Cards or Debit Cards have been the fastest growing category in the credit card sector recently. Part of the attraction is that those who do not have good financial habits find that the very nature of a prepaid credit card helps them avoid overspending. Because prepaid credit cards do not extend you credit, you cannot build or rebuild your credit with most prepaid credit cards. You can only do so with prepaid credit cards with credit builder.
For those looking to rebuild or build your credit, we would suggest getting a secured credit card first instead as it has low annual fees and does not have the transaction fees of most prepaid credit cards. However, if you had gotten into financial troubles in the past because of uncontrolled use of your credit card and are looking to rebuild your credit, then perhaps one of these prepaid credit cards with credit builder may be worth considering.
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