Choose a secured credit card if you have no credit history or a score below 580. Choose an unsecured card if your score is 580+ and you want rewards, higher limits, or no security deposit. Secured cards require a refundable deposit (usually $200-$500) that becomes your credit limit.
Bottom line: Secured cards are a temporary tool for building or rebuilding credit. Once your score reaches 670+, switch to an unsecured rewards card and get your deposit back.
Key Takeaways
- Secured cards require a deposit: Typically $200-$500 that's refundable when you upgrade or close the account
- Both build credit equally: Secured and unsecured cards report to all three bureaus the same way
- Graduation path: Most secured cards upgrade to unsecured after 8-12 months of on-time payments
- Unsecured cards offer rewards: Cashback, travel points, and sign-up bonuses are only available on unsecured cards
- Approval difference: Secured cards approve almost anyone regardless of credit. Unsecured cards require at least fair credit (580+)
| Feature | Secured Cards | Unsecured Cards |
|---|---|---|
| Deposit Required | Yes ($200-$500) | No |
| Credit Score Needed | None/any score | 580+ (fair to good) |
| Typical Credit Limit | $200-$2,500 | $500-$30,000+ |
| Rewards/Cashback | Limited (some offer 1-2%) | 1-6% cashback, travel points |
| Annual Fees | $0-$49 | $0-$550 |
| Sign-Up Bonuses | Rare | Common ($150-$750) |
| Best For | Building/rebuilding credit | Earning rewards, everyday spending |
When to Choose a Secured Credit Card
A secured credit card is your best option if you have no credit history at all, a credit score below 580, recent bankruptcy or collections, or have been denied for unsecured cards. The security deposit minimizes risk for the issuer, so approval is nearly guaranteed.
Top secured cards include the Discover it Secured (2% cashback at gas stations and restaurants, plus a cashback match in year one), Capital One Platinum Secured (no annual fee, $200 minimum deposit), and Chime Credit Builder (no credit check, no fees, no interest).
When to Choose an Unsecured Credit Card
Switch to an unsecured card once your score hits 670+ (or sooner if you can get approved). Unsecured cards offer significantly better rewards, higher credit limits, sign-up bonuses, and purchase protections that secured cards lack.
For fair credit (580-669), consider the Capital One QuicksilverOne (1.5% cashback, $39 annual fee) or Discover it Chrome (2% at gas/restaurants). For good credit (670+), the Chase Freedom Unlimited (1.5-5% cashback, $0 fee) and Citi Double Cash (2% flat cashback) are excellent choices.
How Secured Cards Graduate to Unsecured
Most secured card issuers automatically review your account after 8-12 months. If you've paid on time every month and maintained low utilization, they'll upgrade you to an unsecured card and refund your deposit. Discover typically upgrades after 7-8 months. Capital One reviews at 6 months.
If your card doesn't auto-graduate, call and request a product change. You can also apply for a new unsecured card once your score qualifies, then close the secured card to get your deposit back. Keep the secured card open if possible to maintain account age.
How to Maximize Either Card Type
For secured cards: Use for one small recurring purchase per month (like a streaming subscription). Pay the full balance every month. Don't use more than 30% of your limit. Set up autopay to never miss a payment.
For unsecured cards: Choose a card that aligns with your top spending categories. Pay in full monthly to avoid interest charges that negate rewards. Stack rewards with shopping portals like Rakuten for double-dipping.
How We Evaluated
Comparison based on current card terms, APR ranges, fee structures, and approval data from major issuers as of April 2026. Approval difficulty ratings based on aggregated consumer data and issuer underwriting criteria.
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Is a secured credit card better than no credit card?
Yes, absolutely. A secured credit card builds your credit history and score, while having no credit card means you're not building credit at all. Even a $200 secured card used responsibly will establish a positive credit track record within 3-6 months.
Do secured credit cards build credit faster than unsecured?
No, both types build credit at the same rate. Secured and unsecured cards are reported to the credit bureaus identically. The bureaus don't even distinguish between secured and unsecured accounts. What matters is on-time payments and low utilization.
Can I get my secured card deposit back?
Yes. You get your deposit back when you upgrade to an unsecured card (graduation), close the account, or if the issuer refunds it after a period of responsible use. Most issuers return the deposit within 1-2 billing cycles.
How much should I deposit on a secured credit card?
Deposit $200-$500 to start. You want enough limit to keep utilization low. If you plan to charge $100/month, a $500 deposit gives you 20% utilization, which is ideal. Don't deposit more than you can comfortably set aside.
When should I switch from a secured to unsecured card?
Apply for an unsecured card once your score reaches 670+, or request graduation from your issuer after 8-12 months of perfect payments. Signs you're ready: no missed payments, utilization consistently under 30%, and score trending upward.
Editorial Disclosure: WalletGrower may earn a commission from partner links. Our editorial content is independent and not influenced by advertisers. We research products independently and only recommend what we believe in. Updated April 2026.