Instead, the prepaid cardholder is required to submit funds to his/her account to be able to use the card for purchases. On the other hand, a secured credit provides its holder with a credit limit just like a regular credit swipe card.



However, in order to get approved, the cardholder must first submit a security deposit to his/her account which will be used in case of defaults in payments. This gives the card issuer the assurance that the cardholder will not default his/her debts.

Below are the four main reasons why Canadians may opt to apply for a prepaid Canadian credit card.

1. Get a guaranteed approval. Those who cannot get approved for a standard credit can be sure to get a guaranteed approval with a prepaid credit card. In fact, you can be sure to get a prepaid one in Canada regardless of your credit score.

Even without credit history, you can qualify for a Canadian prepaid credit card. Yes, providers of these cards do not do a credit check on their clients. There's no need to worry whether or not you have good or bad credit.

2. Rebuild your credit score. Prepaid credit cards for Canadians are wonderful tools in rebuilding credit history. If you're living in Canada, you can work on improving your credit score by acquiring this type of credit.

If you haven't yet established your own credit history, a prepaid credit card can help start building your credit rating. While regular credit cards often require good to excellent credit rating, a prepaid card doesn't. It gives consumers the chance to start building or rebuilding their personal credit history without any difficulty.

3. Enjoy the convenience of having a credit swipe card. Having a credit swipe card can come in handy especially if you're frequently on trips or on the road. A credit card can be used for purchasing anywhere without the need to bring cash so it's a lot safer to carry around.

It also gives you the option to shop over the internet from merchants anywhere in the world. All you need to do is deposit an amount that matches your shopping budget and you're all set to use your prepaid credit card. If you're wary about overspending, deposit only a limited amount to your account.

4. Requires a low security deposit. Unlike other types of secured credit cards, most prepaid credit cards require a security deposit of only $75. The difference with a secured credit is that your credit limit is often determined based on the amount of security deposit you've submitted. The security deposit required for a secured card can range from $300 to as much as $1000. If you don't have that cash available, you can opt to apply for a prepaid credit card instead.