Chip Lupo, Credit Card Writer
@CLoop
Credit cards can be secured or unsecured, but most credit cards are unsecured, which means you do not have to place a security deposit to open the account. Unsecured credit card offers are available to people of all credit levels, though the best ones require good credit or better. Secured credit cards are designed for people with bad credit. The security deposit required by a secured card serves as collateral and is fully refundable when you close the account with a $0 balance.
Secured vs. Unsecured Credit Cards
| Category | Secured | Unsecured |
| Minimum Credit Required | Bad or below average credit | Ranges from bad credit to excellent credit, depending on the card |
| Minimum Deposit | $200+ in most cases | No deposit needed |
| Credit Limit | Equal to the deposit amount in most cases | Based on your credit history, income, debt, etc. |
| Reports to Credit Bureaus | Yes | Yes |
| Rewards | Yes, depending on the card | Yes, depending on the card |
| 0% APR Offers | Rarely | Yes, depending on the card |
It’s worth mentioning that you can use either type of card to make purchases and build credit, provided you manage your account responsibly. Major secured and unsecured cards report your account information to the major credit bureaus every month, and there’s no distinction between secured and unsecured credit cards on your credit report.
Your credit history will go a long way in determining whether secured or unsecured credit cards are the best bet for you. To see where you stand, you can check your credit score for free here on WalletHub.
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People also ask
What's the difference between secured and unsecured credit cards?
The main difference between a secured credit card and an unsecured credit card is that secured cards require you to place a refundable security deposit when you open your account. Apart from this security deposit, secured and unsecured credit cards aren't necessarily better or worse for your credit. The amount of this deposit typically serves as the credit limit for the secured card, which means you have to pre-pay for purchases with a secured card. You’ll usually have to...
read full answer by WalletHub, Financial CompanyHow do I know if my credit card is secured or unsecured?
The easiest way to determine if your credit card is secured or unsecured is by recalling whether you were required to make a deposit when opening the account. If you had to place a security deposit to serve as collateral, your card is secured. If no deposit was required, your card is unsecured.
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read full answer by John Miller, Credit Cards ModeratorIs it better to get a secured loan or secured credit card?
A secured credit card is better than a secured loan in certain cases, since secured cards are easy to get, inexpensive to own, and good for building credit. It is better to get a secured loan if you want to pay off a large expense over a long period of time.
Both types of products are “secured” because they require the borrower to provide collateral to the lender. The collateral “secures” the loan or credit...
read full answer by Christie Matherne, Credit Card WriterDid we answer your question?
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