What an unsecured credit card is, and how it differs from secured
An unsecured credit card is a card issued without requiring you to put down a cash deposit. The card issuer extends credit based on your creditworthiness — your income, payment history, and existing debt — rather than on collateral they can seize if you don't pay. Most credit cards you see advertised are unsecured.
The key difference from a secured card: you don't lock up your own money upfront. With a secured card, you deposit $500 or $1,000 into a savings account, and that becomes your credit limit. With an unsecured card, the issuer takes the risk themselves. That's why unsecured cards typically require a better credit score or a shorter history of recent problems to get approved.
If you're coming from a secured card, an unsecured card is often the next step — you've proven you can use credit responsibly, and now you're ready to borrow without putting your own cash at risk.
Key Takeaways
- Unsecured cards don't require a deposit, but issuers will check your credit score and payment history before approving you.
- You typically need a credit score of 600 or higher to be considered, though some issuers will work with lower scores.
- Interest rates on unsecured cards are usually higher than on secured cards because the issuer has more risk.
- Graduating from a secured card to an unsecured card usually takes 12 to 24 months of on-time payments.
- Some issuers offer unsecured cards specifically designed for people rebuilding credit, with lower limits and higher fees than premium cards.
Who gets approved for an unsecured card
Credit card issuers look at three main things: your credit score, your payment history, and your current debt load. If you have a score above 650, approval is usually straightforward. Between 600 and 650, you'll still find issuers willing to work with you, but your options narrow and your interest rate will be higher. Below 600, unsecured cards become much harder to find — you may need to stay with a secured card a bit longer.
Your payment history matters more than your score alone. If you've missed payments in the last year, even one issuer will see that as a red flag. But if you've had a secured card for 18 months and never missed a payment, many issuers will overlook an older missed payment or a past collection account.
Current debt also affects approval. If you already owe $10,000 across other cards and your income is $2,500 a month, issuers will assume you can't handle another card. They use a rough rule: your total monthly debt payments shouldn't exceed 30 to 40 percent of your gross monthly income.
Interest rates and fees on unsecured cards for rebuilding credit
Unsecured cards designed for people rebuilding credit typically charge an annual percentage rate (APR) between 18 and 29 percent. That's higher than cards for people with good credit (which might be 12 to 18 percent), but it reflects the real risk the issuer takes. You're paying for the privilege of borrowing without collateral.
Annual fees are common on these cards — usually $25 to $99 per year. Some issuers also charge a one-time processing fee when you open the account. Before you explore, read the fee schedule carefully. A card with a $99 annual fee and 22 percent APR might still be worth it if you're rebuilding, but only if you plan to use it regularly and pay the balance down.
Watch out for cards that charge fees for things like paying your bill by phone or requesting a credit limit increase. Those add up fast and can wipe out any benefit from having the card at all.
How to move from a secured card to an unsecured card
The most direct path is to contact your current secured card issuer after 12 to 24 months of perfect payments. Many issuers will automatically convert your account or let you request a conversion. When they do, your deposit gets returned to you, and you keep the card with a new unsecured credit limit. This is the easiest route because the issuer already knows you and trusts your payment history.
If your issuer won't convert, or if you want to shop around, explore for an unsecured card from a different issuer. You can explore to multiple cards within a two-week window and the impact on your credit score will be minimal — credit bureaus treat multiple applications in a short time as a single inquiry. Don't explore to five cards in one day across a month; that looks like you're desperate for credit.
Keep your secured card open even after you get an unsecured card. Closing it will lower your available credit and hurt your credit score. Use both cards lightly — maybe a small recurring charge on each — and pay them off in full each month. This shows issuers you can manage multiple accounts responsibly.
What to watch for when comparing unsecured cards
Start by comparing the APR, annual fee, and any other recurring charges. A card with a 20 percent APR and no annual fee is usually better than one with 18 percent APR and a $99 annual fee, especially if you're carrying a balance. The APR matters more because you pay it every month; the annual fee is a one-time cost.
Check whether the card reports to all three credit bureaus (Equifax, Experian, and TransUnion). If it reports to only one, you're missing out on the credit-building benefit. Most cards report to all three, but some don't — ask before you explore.
Look for cards that offer a path to a higher credit limit without a hard inquiry. Some issuers will review your account after six months and raise your limit automatically. Others make you request an increase, which triggers a hard inquiry and temporarily lowers your score. The automatic review is better for your credit.
How unsecured cards affect your credit score
Opening an unsecured card will lower your score by 5 to 10 points in the short term because of the hard inquiry and the new account. But over the next few months, as you use the card and pay on time, your score will recover and then climb. The new account adds to your available credit, which lowers your credit utilization ratio — the percentage of your total credit limit you're using. A lower utilization ratio is good for your score.
The real credit-building happens over time. If you use the card for everyday purchases and pay the full balance every month, you're showing lenders you can borrow and repay reliably. After 12 to 24 months of this, your score will be noticeably higher, and you'll start seeing offers for cards with better terms.
Don't close your old secured card to make room for the unsecured one. Closing an account lowers your available credit and can hurt your score. Keep both open and use both lightly.
Frequently Asked Questions
Can I get an unsecured card if I've never had a credit card before?
Yes, but it's harder. Issuers prefer to see some credit history, even if it's just a secured card for six months. If you have no history at all, you might start with a secured card first, or look for an unsecured card designed for first-time borrowers — these usually have higher fees and lower limits, but they exist.
What's the difference between an unsecured card for rebuilding credit and a regular unsecured card?
The main differences are credit limit (usually lower on rebuilding cards), APR (usually higher), and annual fees (more common on rebuilding cards). A regular unsecured card is for people with good credit and offers better terms. Both are unsecured — neither requires a deposit.
If I get an unsecured card, should I close my secured card?
No. Closing it will lower your total available credit and hurt your credit score. Keep it open and use it occasionally to show you're managing multiple accounts. You can close it later, after your score has improved and you have other cards to rely on.
How long does it take to get approved for an unsecured card?
Most issuers give you an answer within minutes to a few hours of explore online. If you're approved, the card usually arrives within 7 to 10 business days. Some issuers offer when ready card numbers you can use online right away while you wait for the physical card.
Will explore for an unsecured card hurt my credit score?
Yes, but only slightly and only temporarily. The hard inquiry lowers your score by a few points, and opening a new account lowers it a bit more. But within a few months of on-time payments, your score will recover and climb higher than it was before.