Secured vs unsecured credit cards
Reviewed by the CompareMyCard editorial team · Last updated 14 August 2026
An unsecured credit card is the standard kind, the issuer extends you a credit line based on your creditworthiness, no deposit required. A secured credit card requires you to put down a cash deposit, usually equal to your credit limit (a $200 deposit gets you a $200 limit), which the issuer holds as collateral.
A worked example
If you put down a $200 refundable deposit on a secured card, you get a $200 credit limit. Use the card responsibly and pay on time, and many issuers will refund your deposit and upgrade you to an unsecured card after 6 to 12 months, or sooner.
Why it matters when choosing a card
Secured cards exist specifically for people with no credit history or damaged credit who wouldn't qualify for an unsecured card. They report to the credit bureaus just like unsecured cards, so responsible use builds credit the same way. The deposit is refundable, it's not a fee, that's an important distinction from cards that charge a non-refundable “processing fee” instead.