An unsecured credit card is one where you don't put down a cash deposit to back your credit line
With an unsecured credit card, the card issuer extends you credit based on your credit history, income, and creditworthiness — not on money you deposit first. You get a credit limit, you use the card, and you pay back what you spend. The issuer takes the risk that you won't pay; they have no collateral sitting in an account to cover your debt if you default.
This is the opposite of a secured card, where you deposit $500 or $1,000 (or another amount) into a savings account, and the card issuer uses that deposit as security. With an unsecured card, there is no deposit. Most credit cards you see advertised — whether they offer rewards, low introductory rates, or no annual fee — are unsecured.
The tradeoff is straightforward: unsecured cards are easier to get approved for if you already have decent credit, but they're harder to get if you're rebuilding or have no credit history. If you have poor credit or no credit at all, a secured card is usually the first step, and you graduate to unsecured cards once your history improves.
Key Takeaways
- An unsecured card requires no cash deposit; the issuer extends credit based on your credit score and financial history instead.
- Most everyday credit cards — rewards cards, cashback cards, cards with no annual fee — are unsecured.
- You need a credit score of roughly 670 or higher to be considered for most unsecured cards, though some issuers accept lower scores.
- If you have no credit history or a score below 600, a secured card is usually a better starting point than trying for an unsecured card.
- Once you build credit with a secured card, you can move to unsecured cards and often get your deposit back.
Who gets approved for unsecured cards and who doesn't
Credit card issuers use your credit score, payment history, income, and existing debt to decide whether to issue you an unsecured card. If you have a score of 670 or above, you have a reasonable chance with most mainstream issuers. Below 620, approval becomes much harder — many issuers simply won't consider you.
The reason is risk. An unsecured card issuer has nothing to recover if you stop paying. They rely entirely on your willingness and ability to repay. A secured card issuer, by contrast, can use your deposit to cover losses, so they can afford to take on riskier borrowers. That's why secured cards exist: they let people with poor or no credit history build a track record.
If you have no credit history at all — you've never had a loan, never had a credit card, never had a utility bill in your name — some unsecured issuers will still consider you, especially if you have steady income. But most will decline. A secured card is the clearer path.
How unsecured cards report to credit bureaus
Every payment you make on an unsecured card gets reported to the three major credit bureaus: Equifax, Experian, and TransUnion. On-time payments build your credit score. Late payments damage it. The card issuer reports your credit limit, your balance, and your payment history each month.
This is the same reporting that happens with a secured card — the difference is not in how the card reports, but in how easy it is to get one in the first place. Both types of cards help you build credit if you use them responsibly. The advantage of an unsecured card is that you're not tying up your own money in a deposit while you do it.
The difference between unsecured and secured cards in practice
The main practical difference is the deposit. With a secured card, you might put $500 into a savings account that the issuer holds. You can't touch that money while the card is open. With an unsecured card, there is no deposit — you just get a credit limit and start using it.
Unsecured cards often come with better terms if you have decent credit: lower interest rates, rewards programs, sign-up bonuses, or no annual fee. Secured cards typically have higher interest rates and no rewards, because the issuer is taking on riskier borrowers. Once you graduate from a secured card to an unsecured one, you usually get access to better offers.
The other difference is the path forward. If you start with a secured card and build good credit, the issuer will often convert your account to unsecured after 6 to 18 months of on-time payments. When that happens, your deposit gets returned to you. If you start with an unsecured card, there's no conversion step — you just keep using it, and your credit improves with each on-time payment.
When to choose unsecured over secured
Choose an unsecured card if you already have a credit score of 650 or higher and a history of on-time payments. You'll avoid tying up a deposit, and you'll likely get better terms: lower interest rates, rewards, or a sign-up bonus. If you have a decent credit history, there's no reason to use a secured card.
If your score is between 600 and 650, you're in a gray zone. Some unsecured issuers will consider you, but approval is not certain. You can try applying for an unsecured card — a hard inquiry will temporarily lower your score by a few points, but it's worth knowing where you stand. If you get declined, a secured card is your next move.
If your score is below 600 or you have no credit history, skip the unsecured card for now. You'll almost certainly be declined, and each declined application leaves a hard inquiry on your report. Start with a secured card instead, build 6 to 12 months of on-time payments, and then apply for unsecured cards.
Interest rates and fees on unsecured cards
Unsecured cards have variable interest rates, meaning the rate you're offered depends on your creditworthiness. If you have a score of 750 or above, you might get an unsecured card with an APR (annual percentage rate) of 15% to 18%. If your score is 650 to 700, you might see 18% to 24%. Below 650, unsecured cards are rare, but if you find one, the APR could be 25% or higher.
Annual fees vary widely. Many unsecured cards have no annual fee at all, especially if you have good credit. Some charge $95 to $450 per year, usually in exchange for rewards, travel benefits, or other perks. Read the terms before you apply — the annual fee is always disclosed in the pricing information.
Other fees — late fees, foreign transaction fees, balance transfer fees — depend on the specific card. These are all disclosed in the card's terms and conditions, which you can read before you apply.
Building credit with an unsecured card
An unsecured card builds your credit the same way a secured card does: through on-time payments and low credit utilization. Pay your full statement balance by the due date each month, or at least pay more than the minimum. Keep your balance below 30% of your credit limit. Do this consistently for 6 to 12 months, and you'll see your score rise.
The advantage of starting with an unsecured card (if you can get approved) is that you're not paying for the privilege of building credit. With a secured card, you're putting down $500 that you can't use. With an unsecured card, you get the same credit-building benefit without tying up your own money.
If you have multiple unsecured cards, the same rules apply: pay on time, keep balances low, and avoid opening too many new cards in a short period. Each new card application triggers a hard inquiry, which temporarily lowers your score. Space out applications by at least a few months.
Frequently Asked Questions
Can I get an unsecured card with no credit history?
Some issuers will consider you if you have a steady income, but most will decline. A secured card is the standard first step for people with no credit history. After 6 to 12 months of on-time payments on a secured card, you can apply for unsecured cards with much better odds of approval.
What happens if I don't pay an unsecured card?
The issuer will report the missed payment to the credit bureaus, damaging your credit score. After 30 days, they'll charge a late fee. After 60 days, the damage to your score accelerates. After 180 days, the account goes to collections. Unlike a secured card, the issuer has no deposit to recover — they'll pursue you for the debt through collections or legal action.
Can an unsecured card be converted to a secured card?
No, the conversion goes the other direction. You start with a secured card, build credit, and the issuer converts it to unsecured and returns your deposit. An unsecured card stays unsecured.
Do unsecured cards have rewards?
Many do. Unsecured cards often come with cashback, points, or travel rewards, especially if you have good credit. Secured cards rarely offer rewards. This is one reason unsecured cards are preferable once you may have access to for them.
How long does it take to move from secured to unsecured?
Most issuers will convert a secured card to unsecured after 6 to 18 months of on-time payments. Some do it sooner if your credit score improves significantly. Check with your issuer about their conversion timeline — it's usually in the account agreement.