No, people use "prepaid debit card" and "prepaid credit card" interchangeably for some reason(even me lol). This would be known as a secured credit card, because you are putting up collateral for it. That scheme would not work here because opening and closing real credit cards with security deposits (as opposed to virtual card numbers or prepaid debit cards) has a effect on your credit score. You couldn't do this more than a few times before banks start denying you based on your credit history. You don't really want these cards, as they make no sense financially. Essentially, you are loaning the bank your own money, and then the bank will charge you interest at standard credit card rates to use the money you have lent them. They are only for building a credit history then you get rid of them. This is actually the one I used to have https://www.discover.com/credit-cards/secured/
> Essentially, you are loaning the bank your own money, and then the bank will charge you interest at standard credit card rates to use the money you have lent them.
I have no words.
The credit card that I now managed to get by opening an account shared with my partner doesn't charge interest. It's a normal bank card except it has this non-IBAN number that I needed to pay for certain things. I expected those secured cards to work the same.
Is it normal to pay interest on what people in the USA afaik pay most things, like their groceries, with? I thought that only came into play when you overdraw or don't settle the bill at the end of the month.
I'm not sure if the one I've got now allows overdrawing (probably) but it's settled automatically and within a few days so interest beyond the hefty transaction fees already levied on the merchant doesn't make much sense to me, especially if I would put up the collateral on such a secured card.
You are correct, you don't pay interest if you completely settle the bill at the end of the month. Same with the secured card. In fact, the secured card I linked actually offers 2% cash back, so you get paid to use it in some sense as long as you pay it back in full every month. that is very normal with us credit cards. It's really just a method for the bank to see if you can handle paying your bill every month without risking their own money, I suppose. The minimum amount to open the card is just a 200$ deposit so it's not exactly high stakes. When I had mine the bank took initiative on its own after 6 months and sent me my deposit money back unprompted to turn it into a normal credit card. It's really not a thing that's expected to see normal day to day use for extended periods. To answer your question I would imagine most people pay for groceries with debit cards that are just tied to their bank account directly, not credit cards.
