Prepaid credit cards have grown in popularity over the last several years, with Americans spending more than $200 billion on them in 2014. Many consumers use prepaid cards as an alternative to credit cards and checking account debit cards. Purchasing one doesn’t require a credit check. Parents often turn to prepaid cards as a way to give high school and college kids access to money. But there are some downsides to these cards:

• Prepaid cards do not help build credit. This is really important because having a good credit score can impact everything from how much you pay for a car loan to whether a cellphone company will offer you a monthly plan. Cellphone companies rely on your credit score to determine if you qualify for the best rates and plans.
• Prepaid cards often carry a high monthly fee. In addition to a monthly service fee, customers may also have to pay to withdraw cash when they visit an ATM.
• Prepaid cards provide limited spending power. Customers must manage how much money is on the card. As the balance approaches zero, they may be unable to make any more purchases until the card is reloaded.

OneUnited Bank offers the UNITY Visa Secured Credit Card. Called the Comeback Card, it’s perfect for consumers who are trying to rebuild poor credit and build a strong credit profile. Unlike prepaid cards, the UNITY Visa Card reports to all three of the major credit bureaus. This means that paying your bill on time will help build a positive payment history. This will directly impact your credit score. You can also have bad credit and still qualify for a secured credit card.

If you’re looking to open a bank account, OneUnited Bank also offers checking accounts without fees if you set up a direct deposit. All the accounts come with a debit card that gives you rewards for making purchases, free mobile banking and bill pay, and access to more than 15,000 surcharge-free ATMs. Bot a secured credit card or a debit card that comes with a checking account are better alternatives than prepaid cards!