Secured vs Unsecured Credit Card

Updated on March 19, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Secured and Unsecured Credit Card Differences

A normal credit card is issued after providing a sufficient security deposit is called a secured credit card. It is generally given to those individuals and companies who lack credit scores in the market. In contrast, unsecured credit cards are marketed to customers with fair credit and a good image in the market and generally issued to those having trouble in approval of prime credit card accounts.


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Secured credit cards are just like deposits that a person does in a bank, and instead of that, they will get a credit card against that amount of deposit. On the other hand, unsecured credit cards do not depend on a fixed amount and are mainly based on the salary band and a customer’s credit score. This article looks at the key differences between secured and unsecured credit cards.

Secured vs Unsecured Credit Card Infographics

Let us see the top differences between a secured and unsecured credit card.


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Key Differences

The key differences are as follows: –

Secured vs Unsecured Credit Card Comparative Table

Secured Credit CardUnsecured Credit Card
A cash deposit backs a secured credit card in the bank. Then, the bank issues a card with that limit to the customer.An unsecured credit card is not supported by any cash deposit submitted to the bank.
A secured credit card demands the bank for collateral.There is no collateral involved in unsecured credit cards.
These cards often do not have any rewards points or other fringe benefits associated with their cards.These credit cards have a variety of fringe benefits such as reward points and special discounts when payment is made with the cards. Cashback opportunities etc.
Secured credit cards have generally been issued to those whose post-bankruptcy have a bad credit cycle and credit history.Unsecured credit cards offer benefits and are usually given to those with a good credit history and high creditworthiness.
There are generally high annual fees involved in these kinds of credit cards.Unsecured credit cards usually involve low yearly fees, and the bank does not impose any hidden charges.


A good credit card is the one that helps the user according to the risk appetiteRisk AppetiteRisk appetite refers to the amount, rate, or percentage of risk that an individual or organization (as determined by the Board of Directors or management) is willing to accept in exchange for its plan, objectives, and innovation.read more financial stability of the customer and its spending patterns. Therefore, customers with similar and recurring spending patterns should opt for a secured credit card as there is not much change in a customer’s spending pattern on a month-on-month basis.

On the other hand, if the customer has a good track record of spending and paying off his debts on time, he should opt for an unsecured credit card with a distinctive spending pattern and a good credit score.

There are nowadays various banks offering various credit cards. Therefore, if the user uses the same portal frequently, he should opt for a credit card associated with that particular vendor.

Recommended Articles

This article is a guide to Secured vs Unsecured Credit Cards. We discuss the difference between secured and unsecured credit card and a comparison table. You may also have a look at the following articles: –

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