People with bad credit generally can graduate from a secured credit card to a decent unsecured card after 12 to 18 months. But it depends on what you do in the meantime, not to mention how badly damaged your credit happens to be. Making on-time payments every month you have a secured card will help speed things up, as will using only a portion of your credit limit.
When the time comes, the switch from a secured card to an unsecured credit card usually happens in one of three ways:
You close your account after approval for an upgrade – The secured card’s issuer will refund your deposit, minus any unpaid balance, when you close your account.
Your issuer offers you a credit-limit increase – If the bank that issued your secured card reviews your account and likes what it sees, it might offer you a higher credit limit. This would convert your secured credit card to a partially unsecured card. But everything else would stay the same. And you wouldn’t get your deposit back at this time.
Your issuer returns your deposit – Your existing account stays open in this scenario, but it becomes fully unsecured because you get your deposit back. It will be returned via check or statement credit.
You can monitor your credit-building progress for free on WalletHub, the only site with free daily updates to your credit score and report. When your credit score reaches “fair” territory, you’ll know you’re ready for an upgrade, if you haven’t been offered one already.
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