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How Do Secured Credit Cards Work?
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What is a Secured vs. Unsecured Credit Card?
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Last Updated: October 23, 2024
Key Takeaways
- Secured cards look and act like a traditional credit cards except that you provide a refundable security deposit equal to your credit limit.
- Unsecured credit cards (traditional cards) require a higher credit score and more income to qualify than secured cards.
- Secured cards might have a higher interest rate and a credit limit cap equal to your deposit amount.
| Secured Credit Card | Unsecured Credit Card | |
|---|---|---|
| No credit history required | Established credit history required | |
| Security deposit required | No security deposit required | |
| Lower credit limit | Higher credit limit | |
| Higher interest rate | Lower Interest rate | |
| Reward options exist, but are less generous | More rewards & cards to choose from |
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