Secured credit cards are great options for people who have no credit history, poor credit or need to rebuild their credit, but the benefits of a secured card are limited – offering minimal long-term value.
With a secured credit card, your credit limit is low, typically equal to a security deposit required by the card issuer. Plus, rewards are typically not available.
In the case of an unsecured card, a security deposit is not required. Instead of money being taken from a security deposit, the cardholder is extended a line of credit and charged interest and fees for balances that are paid late. Both secured and unsecured cards can be used to make purchases or build credit.
Nevertheless, with successful use of secured cards, your credit rating can be boosted by establishing positive payment history – paving the way to “graduate” to an unsecured card with the same bank. That can mean a higher credit line or limit, more perks and a chance to reap rewards. Plus, you can get the security deposit returned.
Discover it® Secured Credit Card
BankAmericard® Secured Credit Card
Capital One Platinum Secured Credit Card
Citi® Secured Mastercard®
See related: How a secured card can help your score
request a higher credit limit.
Here’s a sampling of secured cards and what’s required to upgrade to an unsecured card:
| Secured card name |
Graduation requirements |
| Discover it® Secured Credit Card |
Account reviewed after at least 8 months of positive payment history |
| BankAmericard® Secured Credit Card |
No official timeline, but reports indicate account may graduate at 12 months |
| Capital One Platinum Secured Credit Card |
No official policy, but some users have reported success graduating after first year |
| Citi® Secured Mastercard® |
Account is reviewed after 18 months (some report graduation at 12 months) |
Other options for graduating from a secured card
While not all secured credit cards automatically review an account to graduate, you can often request that your issuer upgrade you to a different product. Typically, you will have the best luck with your assessment after six months to a year of paying on time.
By sticking with your card issuer and opting for a different card, you can elect something with better rewards, a higher credit line or a lower interest rate. Plus, in some cases, remaining with the same issuer means no application and no credit check – which means no impact on your credit score.
You are also free to find unsecured card offers from other issuers. Because your payment history from the secured card is reported to credit bureaus, you can be evaluated with this updated information. Good places to start are unsecured cards designed for those with poor credit or checking for prequalified offers to make sure you have a good chance of approval.
CreditCards.com, but you can still find a great card offer for yourself! Our CardMatch tool can help match you with prequalified offers and cards that align with your credit history – with no harm to your credit score. Get personalized offers from our partners in seconds.
Whether you are trying to graduate or apply for a new product, there are some basic steps everyone can follow to improve their credit score and boost their chances of being approved for an unsecured card.
For people with poor credit, secured credit cards can help you build your credit and establish a positive payment history.
Once your credit score improves, it will be possible to make the transition to an unsecured card, which can offer you better benefits, including lucrative rewards like cash back, miles and points. Being responsible with your payments and your credit score is the quickest way toward unlocking a better product.