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How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Advertising Disclosure

LendingTree is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products. We are compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order).

Secured vs. Unsecured Credit Cards: What’s the Difference?

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Content was accurate at the time of publication.
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If you have good to excellent credit, chances are you’ll be able to qualify for an unsecured credit card that offers valuable rewards and benefits. But if your credit is damaged from past financial mistakes or you haven’t built up enough history, your only option may be a secured credit card. That’s because secured cards require you to deposit cash as collateral (usually starting at $200 or $300), instead of relying heavily on your credit score for approval.

The good news is that secured credit cards can serve as a great tool to help you build your credit and eventually graduate to an unsecured credit card. Here’s what you need to know about secured and unsecured cards to help determine which is the right fit for you:

What is a secured credit card?

A secured credit card is a type of credit card that requires you to submit a cash deposit upfront in order to open the account. This security deposit serves as collateral and typically determines the amount of your line of credit. For example, if you put down a $300 deposit, your credit line will equal $300.

The security deposit helps reduce the card issuer’s risk, since it can be used to cover your balance in the event you don’t pay your bill. That’s why secured credit cards usually have lower credit requirements and credit limits than traditional credit cards.

This makes secured credit cards ideal if you have a limited credit history or poor credit. And with responsible usage, these cards can help you build your credit and graduate to an unsecured credit card over time. If this happens — or if you pay your balance in full and close your account — your security deposit will be refunded.

What is an unsecured credit card?

You may not be familiar with the term “unsecured credit card,” but it’s actually what most people are referring to when they talk about credit cards. An unsecured credit card, also sometimes referred to as a “traditional” card, doesn’t require a deposit for approval. Therefore — as the name suggests — any debt you hold on the card is not backed or secured by collateral.

Card issuers typically use a credit check to analyze whether or not you’ll be a lending risk for an unsecured card. Your credit score is the biggest factor used to determine your approval status. Issuers often take your annual income and employment status into consideration as well.

 

Difference between secured and unsecured credit cards

Secured credit cards work just like unsecured credit cards — for the most part. The main difference is that the former requires you to submit a security deposit, and the latter does not. Additionally, a secured card bases your credit limit on the amount of your security deposit, while an unsecured card’s credit line is determined by your credit history. Otherwise, you can use a secured credit card to make purchases with any merchant that accepts credit cards.

Secured vs. unsecured credit cards

Secured credit cardUnsecured credit card
Deposit requiredYesNo
Credit requirementLimited, poor or fair creditCan range from limited/poor credit to excellent credit
Credit limitMatches your depositDepends on your credit history
Reports to the major credit bureaus (Equifax, Experian and TransUnion)TypicallyYes
Offers rewardsSometimesSometimes
Where can it be used?Anywhere credit cards are acceptedAnywhere credit cards are accepted
FeesTend to have few or no feesCards for limited/poor credit can have many hidden fees

Is a secured or unsecured credit card better?

The best card option depends on your credit history. Secured credit cards are better for individuals who don’t have good enough credit to qualify for traditional credit cards. The same is true for younger adults without established credit yet or looking for a beginner credit card. Starting with a secured credit card can help you build your credit over time and eventually qualify for other credit cards.

If you have good to excellent credit, you may qualify for an unsecured rewards credit card, which often come with higher credit limits, access to travel benefits, and other valuable perks. These cards also allow you to earn points or miles redeemable for travel, cash back or other popular redemptions.

Since secured credit cards require a security deposit instead of a credit inquiry, they are often easier to qualify for as long as you have the necessary funds. If you fail to make payments, though, the card issuer will use your deposit to cover the outstanding card balance.

TIP: You may still qualify for an unsecured credit card even with a lower credit score, but these options are often accompanied by costly fees. Secured credit cards are generally a more affordable option until you can qualify for a higher-tiered card.

Regardless of which type of card you choose, you can follow some standard practices to get the most out of your card.

  • Know your score: Knowing your credit score can help determine whether you qualify for a particular card.
  • Pay your balance in full: By paying off your card balance each month, you’ll avoid costly interest fees charged by your card issuer.
  • Make on-time payments: Pay attention to your card’s payment due date. Paying your bill on time each month will keep you from getting charged late fees and penalty APR. Plus, your issuer reports payments to the major credit bureaus, so paying on time can help you build a positive credit history.
  • Limit your credit utilization: Credit utilization is the percentage of available credit you use. It is one factor that determines credit scores and includes any revolving credit accounts, including credit cards. Using too much of your available credit can make it more challenging to pay off your monthly balances and affect your credit score. Aim to limit your credit utilization to 30% or less.

Which banks offer secured credit cards?

A variety of banks offer secured credit cards, from large institutions to smaller banks and credit unions. That said, American Express, Chase and Wells Fargo do not issue secured cards since their main focus tends to be applicants with good to excellent credit.

IssuerSecured credit cards
American Express secured credit cardNone
Bank of America secured credit cardBank of America® Customized Cash Rewards Secured Credit Card
Bank of America® Unlimited Cash Rewards Secured Credit Card
BankAmericard® Secured Credit Card
Capital One secured credit cardCapital One Quicksilver Secured Cash Rewards Credit Card
Capital One Platinum Secured Credit Card
Chase secured credit cardNone
Citi secured credit cardCiti® Secured Mastercard®
Discover secured credit cardDiscover it® Secured Credit Card
Navy Federal secured credit cardNavy Federal nRewards® Secured Credit Card
U.S. Bank secured credit cardU.S. Bank Altitude Go Visa Secured Card
Wells Fargo secured credit cardNone

Best secured credit cards

The best secured credit cards report your credit history to the three major credit bureaus (Equifax, Experian and TransUnion), have no annual fees and provide a path to graduate to an unsecured card. The following cards all fit that criteria:

Overall best secured card

| Disclosures
Discover it® Secured Credit Card
Discover it® Secured Credit Card
apply-now-icon Apply Now
on Discover's secure site
Rates & Fees
N/A
28.24% Variable APR
$0
Earn 2% cash back at Gas Stations and Restaurants on up to
  • No credit score required to apply.
  • No Annual Fee, earn cash back, and build your credit history.
  • Your secured credit card requires a refundable security deposit, and your credit line will equal your deposit amount, starting at $200. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 7 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.
  • Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites. Activate for free.
  • Terms and conditions apply.
300 600
Limited/Poor

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best for a low deposit

| Disclosures
Capital One Platinum Secured Credit Card
Capital One Platinum Secured Credit Card
apply-now-icon Apply Now
on Capital One's secure site
Rates & Fees
N/A
29.99% (Variable)
$0
Non-rewards Card
  • No annual or hidden fees. See if you're approved in seconds
  • Building your credit? Using the Capital One Platinum Secured card responsibly could help
  • Put down a refundable security deposit starting at $49 to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
  • Monitor your credit score with CreditWise from Capital One. It's free for everyone
  • Get access to your account 24 hours a day, 7 days a week with online banking to access your account from your desktop or smartphone, with Capital One's mobile app
  • For Capital One products listed on this page, some of the benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
300 600
Limited/Poor

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best for flat-rate cash back

| Disclosures
OpenSky® Secured Visa® Credit Card
OpenSky® Secured Visa® Credit Card
apply-now-icon Apply Now
on Capital Bank, N.A.'s secure site
N/A
25.64% (variable)
$35
Earn up to 10% cash back* on everyday purchases
  • New feature! Earn up to 10% cash back* on everyday purchases
  • No credit check to apply. Zero credit risk to apply!
  • Looking to build or rebuild your credit? 2 out of 3 OpenSky cardholders increase their credit score by an average of 41 points in just 3 months
  • Get free monthly access to your FICO score in our mobile application
  • Build your credit history across 3 major credit reporting agencies: Experian, Equifax, and TransUnion
  • Add to your mobile wallet and make purchases using Apple Pay, Samsung Pay and Google Pay
  • Fund your card with a low $200 refundable security deposit to get a $200 credit line
  • Apply in less than 5 minutes with our mobile first application
  • Choose the due date that fits your schedule with flexible payment dates
  • Fund your security deposit over 60 days with the option to make partial payments
  • Over 1.4 Million Cardholders Have Used OpenSky Secured Credit Card To Improve Their Credit
  • *See Rewards Terms and Conditions for more information
300 600
Poor

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best unsecured credit cards

The best unsecured credit cards also report the major credit bureaus and have minimal fees. Other important factors include the sign-up bonus value, rewards rate, annual fee, interest rate and other benefits and protections offered by the card. Ultimately, the right card for you depends on your financial needs and how you plan to use the card. Here are some of our top picks for the best traditional credit cards:

Overall best credit card

| Disclosures
Capital One SavorOne Cash Rewards Credit Card
Capital One SavorOne Cash Rewards Credit Card
apply-now-icon Apply Now
on Capital One's secure site
Rates & Fees
0% intro on purchases for 15 months
19.99% - 29.99% (Variable)
$0
3% Cash Back on dining, entertainment, popular streaming services and at grocery
  • Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening
  • Earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®), plus 1% on all other purchases
  • Earn 10% cash back on purchases made through Uber & Uber Eats, plus complimentary Uber One membership statement credits through 11/14/2024
  • Earn 8% cash back on Capital One Entertainment purchases
  • Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply
  • No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
  • 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; balance transfer fee applies
  • No foreign transaction fee
  • No annual fee
  • For Capital One products listed on this page, some of the benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
660 720 850
Good/Excellent

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best rewards card

| Disclosures
Chase Freedom Flex℠*
Chase Freedom Flex℠
Learn More
on Chase's secure site
0% intro APR on purchases for 15 months
20.49% - 29.24% variable
$0
5% cash back on up to $1,500 in combined purchases in bonus
  • Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
  • 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more
  • 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1% cash back on all other purchases.
  • No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24%.
  • No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Flex℠ card
  • Keep tabs on your credit health - Chase Credit Journey helps you monitor your credit with free access to your latest score, real-time alerts, and more.
660 720 850
Good/Excellent
*The information related to the Chase Freedom Flex℠ has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Best 0% APR card

| Disclosures
Wells Fargo Reflect® Card*
Wells Fargo Reflect® Card
Learn More
on Wells Fargo's secure site
0% intro APR 21 months from account opening
18.24%, 24.74%, or 29.99% Variable APR
$0
None
  • Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
  • 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 18.24%, 24.74%, or 29.99% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min $5.
  • $0 Annual Fee.
  • Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
  • Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
660 720 850
Good/Excellent
*The information related to the Wells Fargo Reflect® Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

The information related to the Bank of America® Customized Cash Rewards Secured Credit Card, Bank of America® Unlimited Cash Rewards Secured Credit Card, BankAmericard® Secured, Citi® Secured Mastercard®, Navy Federal nRewards® Secured Credit Card and U.S. Bank Altitude Go Visa Secured Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

A secured credit card requires a refundable security deposit upfront that serves as your line of credit. You can use a secured credit card anywhere traditional credit cards are accepted.

You can get your security deposit back when you upgrade to an unsecured credit card or close your secured credit card account — as long as your account is in good standing and your balance is paid in full.

You can get a secured credit card by applying online or in-person at a bank and submitting the required security deposit. To be eligible, you typically need to be at least 18 years old and have a Social Security number, U.S. address and U.S. bank account.

If the secured credit card reports your account activity to the three major credit bureaus, you can build your credit over time with responsible usage. This means paying your balance on time and in full (if possible) every month, as well as staying well below your credit limit.

Chase is one of the few major issuers that doesn’t offer a secured credit card. If you’re looking to build credit with a Chase card, the issuer does offer the Chase Freedom Rise℠ Credit Card.

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