• Skip to primary navigation
  • Skip to main content
  • Skip to footer

FinanceJar

FinanceJar

Take the next step on your journey

  • Credit Scores
    • Get Free Credit Score
    • Get Your Free FICO Score
    • Credit Score Range
  • Credit Repair
  • Credit Reports
    • Credit Inquiries
  • Credit Cards
    • Credit Card Reviews
    • Best Credit Cards for Bad Credit
    • Fair Credit
    • No Credit
    • Building Credit
    • Secured
    • Unsecured
    • 0% Interest
    • No Annual Fee
    • Guaranteed Approval
    • No Credit Check
    • No Foreign Transaction Fee
    • Gas
    • Students
  • Debt
    • List of Collection Agencies
  • Loans
  • About Us
    • 24/7 Support:

      323-649-8707

    Home Credit Cards What Is an Unsecured Credit Card?

    What Is an Unsecured Credit Card?

    Hand holding an unsecured credit card

    At a glance

    An unsecured credit card is one that you don’t have to pay a security deposit for—a normal credit card, in other words.

    Written by Jessica Norris and Robert Jellison

    Dec 9, 2022

    Fresh advice you can trust

    We promise to always deliver the best financial advice that we can. Our writers and editors follow strict editorial standards and operate independently from our advertisers and affiliates. Learn more about how we make money.

    Most credit cards are unsecured, which means you don’t have to put down any collateral when you open them.

    Although unsecured credit cards are the most common cards out there, they can be hard to get for new borrowers and people with damaged credit scores. Read on to learn more about these cards and how they compare to the alternatives.

    Table of Contents

    1. What does it mean for a credit card to be unsecured?
    2. Should you get an unsecured card or a secured card?
    3. What credit score do you need to apply for an unsecured card?
    4. Alternatives to unsecured credit cards

    What does it mean for a credit card to be unsecured?

    In the credit industry, the term unsecured refers to borrowed money that isn’t backed by collateral—an asset that your lender can keep if you fail to pay them back on time.

    You’re probably familiar with collateral in the context of loans. For instance, on mortgages, the collateral that “secures” your loan is your house, since the bank can foreclose on it (reclaim it) if you stop making payments.

    Some credit cards, known as secured credit cards, also feature collateral. When you open them, you have to put down money as a security deposit, which your lender can keep if you consistently fail to pay your bills.

    If a credit card is unsecured, it just means that you can open it without putting down a deposit.

    Note that the term has nothing to do with safety. Although “unsecured” sounds worse than “secured,” neither type of card is any less safe to use.

    Unsecured credit cards aren’t always free to open

    Although they don’t require security deposits, unsecured cards sometimes still charge fees when you open them (such as a one-time “startup fee” or a recurring annual fee). This is especially common when it comes to credit cards that feature rewards programs.

    Unsecured cards are harder to qualify for

    Unsecured cards are riskier for lenders than secured cards. If you suddenly stop paying your bills on a secured card, the credit card company can keep your deposit to make up for their loss, whereas on an unsecured card, they don’t have this option.

    For this reason, unsecured credit cards are more exclusive than secured cards. Almost anyone can get a secured card, whereas if you have a bad credit score, it can be hard to get an unsecured one.

    This doesn’t mean that you need a stellar credit score to get an unsecured card. In fact, some companies specifically offer unsecured cards for bad-credit borrowers. These cards are just harder to qualify for on average.

    Should you get an unsecured card or a secured card?

    Again, most credit cards are unsecured; it’s the “default” option. Secured credit cards are meant for very specific types of borrowers.

    You should consider getting a secured card if you:

    • Have bad credit: If you’ve struggled with credit trouble in the past, many credit card companies will only be willing to offer you a secured credit card. From their perspective, giving you an unsecured card would be too big of a gamble.
    • Are a new borrower: Similarly, if you’re young or just have never used credit much before, you have an unproven track record, so it will be much easier to get a secured card than an unsecured one.

    If you fall into either of those categories, a secured credit card might be right for you. In essentially all other circumstances, you should apply for an unsecured card. In addition to not requiring a security deposit, these cards often come with better terms since they’re harder to get and marketed to more experienced and established borrowers..

    Perks of unsecured credit cards

    Unsecured credit cards tend to have several advantages over secured cards:

    • Lower APRs: A credit card’s APR is the yearly rate of interest you’ll pay on it if you carry a balance from month to month. Unsecured cards often have lower interest rates than secured cards.
    • Higher credit limits: On most secured credit cards, your credit limit is determined by the size of your deposit. It’s easier to get a high limit on an unsecured card since it’s not tied to how much money you can put down upfront.
    • Rewards and benefits: Unsecured cards are more likely to offer rewards (such as cash back) and other perks, like concierge services and airport lounge access.

    Note that the above isn’t universally true, particularly when it comes to credit cards for bad credit.

    If your credit score leaves something to be desired and you’re deciding between a secured and unsecured card, make sure to look carefully at each card’s Schumer Box. This will list all of its APRs and fees; carefully compare them to see which card is actually better.

    What credit score do you need to apply for an unsecured card?

    There’s no one minimum credit score that you need to apply for an unsecured credit card. Every credit card company is free to set their own requirements.

    That said, you’ll have a lot more trouble finding an unsecured card if you have a FICO score below 580. Scores in this range are considered “poor,” and it’s a common cutoff point, even for entry-level unsecured credit cards.

    Other requirements for an unsecured credit card

    Your credit score isn’t the only thing that matters when you apply for an unsecured credit card. To decide if you’re eligible, the card issuer may look at your:

    • Credit report: If you have derogatory marks on your credit report, those might disqualify you from getting the credit card you want, even if they’re old enough that they’re not really hurting your credit score anymore.
    • Income: This doesn’t show up on your credit report, but credit card companies often look at it anyway to make sure you’ll be able to keep up with your debts.
    • Regular expenses: For the same reason, your prospective credit card company will be interested in your debt-to-income ratio (e.g., your monthly rent or mortgage payments and other expenses, as compared with your income).
    • Prior relationship: If you already have one or more of the company’s other credit cards, they’ll factor in your payment history on them. If you’ve shown them that you’re a responsible borrower, that can sometimes compensate for a poor credit score. However, the reverse is also true; if your history with them has been fraught, that might counterbalance an otherwise solid credit profile.

    When you apply for a secured card, it’s also possible that your prospective creditor will look at all of the above. However, it’s less likely, since secured cards are easier to get in general.

    Some credit cards offer prequalification or pre-approval

    If you’re not sure whether you’ll qualify for a particular card, you can test the waters by visiting its website and seeing if there’s an option to prequalify.

    This will give you an idea of whether or not you’re eligible for the card (although getting pre-approved isn’t a guarantee). It also won’t hurt your credit, since prequalifying just involves a soft credit check, which will have no effect on your credit score.

    Alternatives to unsecured credit cards

    If you can’t qualify for a secured credit card right now (or if all the ones that you can get have exorbitant fees), you have several other options.

    Getting a secured credit card

    It might go without saying, but the obvious alternative is to get a secured credit card. You can use it for a while to improve your credit score, then apply for an unsecured one.

    Note that many secured cards will let you upgrade to an unsecured card after a while (e.g., if you use it for 6 months to 1 year without missing any payments). On most cards, when you upgrade, your card issuer will refund your security deposit.

    Becoming an authorized user

    Instead of getting a credit card of your own, you can also ask a trusted family member or friend to add you as an authorized user on their credit card. If they do, you’ll receive your own physical copy of their credit card and be able to use their line of credit.

    In many cases, their credit history on the card will also be added to your own credit report. This will give your credit score a boost (assuming they’ve managed the account responsibly), and will leave you in a much better position to apply for an unsecured credit card of your own in the future.

    Just be sure to not overspend on the account. The primary cardholder will be responsible for your debts, so being careless might damage your relationship with them, and if they fall behind on their bills, being an authorized user might end up hurting your credit rather than helping it.

    Takeaway: Unsecured credit cards don’t require a security deposit.

    • Unlike secured credit cards, you don’t have to put down any collateral when you open an unsecured card.
    • Most credit cards are unsecured. If you don’t know which you have, it’s almost certainly unsecured.
    • Unsecured credit cards are harder to qualify for than secured cards, although it’s still possible to get one if you have a bad credit score.
    • Because they’re aimed at more reliable borrowers, unsecured credit cards have better terms than secured cards on average.

    Jessica Norris

    Credit Cards Editor

    View Author

    Jessica Ginter-Norris writes for FinanceJar. She has previously worked in academic editing, web content editing, and math e-learning content writing. She continues to be involved in various writing and editing projects as well as doing editorial training with the Chartered Institute of Editing and Proofreading.

    Robert Jellison

    Managing Editor

    View Author

    Robert Jellison is a Managing Editor and writer specializing in the intersection of insurance, finance, and tech. In the past, he's written and edited work for several SaaS companies, and created work for various investing and trading websites.

    Related Articles

    Credit report showing SYNCB/PPC
    Credit Inquiries

    Nov 5, 2021

    SYNCB/PPC: What Is It and Why Is It on My Credit Report?

    SYNCB/PPC stands for Synchrony Bank/PayPal Credit. There are a few...

    FinanceJar Team
    Polar bear guarding credit report in ice, representing how to freeze your credit
    Credit Reports

    Sep 22, 2021

    How to Freeze Your Credit

    A credit freeze prevents prospective lenders and creditors from...

    Samuel Osbourne
    new credit card envelope does it hurt credit
    Credit Scores

    Oct 1, 2021

    Does Opening a Credit Card Hurt Your Credit?

    Opening a new credit card can hurt your credit score slightly in...

    FinanceJar Team
    Black car being repossessed which has an impact on credit
    Credit Repair

    Aug 5, 2022

    How Long Does a Repo Stay on Your Credit?

    A repossession takes 7 years to come off your credit report,...

    FinanceJar Team
    Gauge representing credit utilization rate
    Credit Scores

    Oct 6, 2021

    Credit Utilization: What It Is and How It Affects Your Credit Score

    Your credit utilization is the amount of your revolving credit that...

    FinanceJar Team
    Man disputing an item on his credit report with the credit bureaus
    Credit Repair

    Sep 13, 2021

    How to Dispute an Item on Your Credit Report

    If you suspect you have inaccurate information on your credit...

    Victoria Scanlon
    FinanceJar

    Footer

    Credit

    • Credit Scores
    • Credit Repair
    • Credit Reports
    • Credit Cards
    • Debt

    Company

    • About Us
    • Contact Us

    Legal

    • Terms & Conditions
    • Privacy Policy

    Call Us

    9AM – 9PM EST: 347-527-4868
    24/7 Help Line: 323-649-8707

    How We Make Money

    We make money from advertising. We place links on our website to our affiliates, and when you click those links, our affiliates compensate us for it. Our relationships with our affiliates may affect which products we feature on our site and where these products appear in our articles.

    Facebook Twitter Instagram TikTok YouTube LinkedIn Pinterest

    © 2025 – ONR Financial Networks LLC – All Rights Reserved.

    • Credit Scores
      • Get Free Credit Score
      • Get Your Free FICO Score
      • Credit Score Range
    • Credit Repair
    • Credit Reports
      • Credit Inquiries
    • Credit Cards
      • Credit Card Reviews
      • Best Credit Cards for Bad Credit
      • Fair Credit
      • No Credit
      • Building Credit
      • Secured
      • Unsecured
      • 0% Interest
      • No Annual Fee
      • Guaranteed Approval
      • No Credit Check
      • No Foreign Transaction Fee
      • Gas
      • Students
    • Debt
      • List of Collection Agencies
    • Loans
    • About Us
      • 24/7 Support:

        323-649-8707

      We hope this template helps you achieve your goals.

      Would you please review us?

      A review would mean a lot to us — and takes less than 20 seconds. Let us know what you think. Thanks!

      Leave My Review

      What you’ll get

      • Assess

        Fill in your information and we will securely pull your TransUnion credit report.

      • Address

        We challenge inaccurate negative items with the bureaus and your creditors.

      • Advise

        We will give you advice for how you can improve your credit. Don’t want to wait? Call us now.

      Don’t want to wait? Call us!

      Monday to Friday, 10AM - 7PM EST

      FinanceJar

      Get a FREE 5-minute credit consultation.

      Get a credit improvement plan that works for you with 1 phone call.

      What you’ll get

      1
      Assess

      Fill in your information and we will securely pull your TransUnion credit report.

      2
      Address

      We challenge inaccurate negative items with the bureaus and your creditors.

      3
      Advise

      We will give you advice for how you can improve your credit. Don’t want to wait? Call us now.

      This is completely secure and won’t hurt your credit score.

      By clicking "Submit" I agree by electronic signature to: (1) be contacted about credit repair or credit repair marketing by a live agent, artificial or prerecorded voice and SMS text at my residential or cellular number, dialed manually or by autodialer, and by email (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

      Don’t want to wait? Call (888) 859-0871 now

      FinanceJar

      Advertising Disclosure

      Some of our articles feature links to our partners, who compensate us when you click them. This may affect the products and services that we showcase in our articles and how we place and order them. It does not affect our evaluations of them, which our writers and editors create independently, without considering our relationships with our partners.

      FinanceJar

      Editorial Standards

      We promise to always deliver the best financial advice that we can. That’s our first priority, and we take it seriously.

      To ensure that our articles and reviews are objective and unbiased, our writers and editors operate independently from our advertisers and affiliates. Our writers do not take FinanceJar’s relationship with its affiliates into consideration when writing their reviews and articles.

      Everything we publish is as accurate and as complete as we can make it. All of our articles undergo several rounds of fact-checking before we publish them, and we do our best to keep them as no-nonsense and jargon-free as possible while still delivering the information that you need.

      We know that taking financial advice from us requires a lot of trust on your part. We’re grateful for that trust, and we won’t abuse it. Learn more about our editorial standards.

      FinanceJar

      How We Make Money

      FinanceJar partners with other companies in the credit and finance industry, such as credit card issuers and credit repair companies.

      We make money through advertising. Our pages feature links to our partners’ websites. If you click on one of those links, we get paid.

      The links to our partners are always clearly marked. You’ll always be able to tell what you’re clicking. We’ll never try to trick you into clicking anything you’re not genuinely interested in.

      That’s the only way that we make money. We don’t accept compensation in exchange for reviews or articles, and we don’t directly sell any products or services ourselves. Our editorial team operates independently (with no influence from our affiliates or our advertising team) so as to avoid compromising the objectivity of our reviews. Learn more about how we make money.