A secured credit card requires a cash deposit that typically becomes your credit limit, reducing risk for the issuer. An unsecured credit card extends credit based on your creditworthiness alone, with no deposit required.
Secured cards are commonly used by people with limited or damaged credit history, since they’re easier to qualify for and can help build or rebuild a credit profile over time with responsible use.
Unsecured cards are generally available to applicants with established, healthier credit, and often come with better rewards programs, since the issuer is taking on more risk without collateral.
Both types report to credit bureaus in the same way, so a secured card used responsibly builds credit just as effectively as an unsecured one – the deposit doesn’t limit how much your score can improve.
Many issuers offer a path from secured to unsecured after 6-12 months of on-time payments, refunding the deposit once the account is upgraded.