An unsecured credit card is a great way to build your credit, minding you can manage to have plastic in your wallet. They do not require collateral in the form of a security deposit and come available for people of all credit scores.
What is an Unsecured Credit Card?
An unsecured credit card operates under a different model than a secured credit card. Unsecured cards, the most common credit card type, often represent what people want when applying for a new credit card.
They work by providing you with a revolving line of credit, meaning you can spend up to an approved amount without making a payment within a monthly billing cycle.
Unsecured credit cards don’t require a security deposit or other collateral. Unless somebody mentions a credit card, it’s safe to assume it’s an unsecured credit card unless they state otherwise.
A secured credit card is a type of credit card that requires you to put down an upfront cash deposit, usually equaling the amount of your credit limit.
What is the Difference Between a Secured and an Unsecured Credit Card?
Secured credit cards users typically have little to no credit history or have poor credit. In contrast, unsecured credit card users usually have a credit history and at least fair credit.