Similarities: Both prepaid cards and secured credit cards require you to deposit money before you can use them. Both can be used at places like gas pumps, grocery stores, etc., for purchases. Differences: Prepaid cards do not have a credit limit, while secured cards do. Before you can be approved for a secured credit card, you must make a security deposit against its credit limit. This security deposit is then placed in a savings account and kept there until you close the account or until your card is converted to an unsecured credit card. Secured credit cards work a lot like regular credit cards. With a secured card, you are responsible for making timely payments, just like with a regular card. This helps you practice good repayment habits and establish a positive payment history, which is an important part of rebuilding or establishing credit. When you make a purchase with a secured credit card, the amount is deducted from the revolving credit limit. The available credit limit goes up again when you pay off your credit card balance, just like with a regular credit card. A security deposit is required for a secured card because you are a higher risk borrower. Prepaid cards, however, have no credit limit. You simply make a deposit onto the card, and then it goes into the account. When you make a purchase with prepaid card, the amount is deducted from the balance. Once all of the deposit has been spent, more money must be deposited before you can spend again.