Secured Vs Unsecured Credit Cards: Which Should You Get First

**Secured vs Unsecured Credit Cards: A Guide to Choosing the Right One**

When it comes to building credit or rebuilding a damaged credit score, choosing the right secured credit card can be a crucial decision. Two popular types of credit cards are secured and unsecured, each with its unique benefits and drawbacks. In this article, we’ll delve into the differences between these two options, exploring financial details, APR figures, and actionable advice to help you make an informed decision.

**Secured Credit Cards**

A secured credit card is a type of credit card that requires a security deposit, typically equal to the amount of the credit limit. This deposit serves as collateral, ensuring the credit card issuer can recover it if the account is late or not repaid. Secured credit cards are ideal for those with limited or no credit history.

**Unsecured Credit Cards**

An unsecured credit card offers full credit limits without requiring a security deposit. These cards often come with lower interest rates and APRs, making them more accessible to those with good credit. However, they may require a higher credit score to qualify.

**Key Differences**

* Security Deposit: Secured credit cards have a required deposit, while unsecured credit cards do not.
* Interest Rate and APR: Unsecured credit cards typically offer lower interest rates and APRs than secured credit cards.
* Credit Limit: Secured credit cards usually have smaller credit limits compared to unsecured credit cards.

**Real Examples**

Consider the following examples:

* A 30-year-old with a poor credit score (,000 debt) might opt for a secured credit card with an interest rate of 18% APR and a 00 credit limit. This could help them establish or rebuild credit.
* A young professional with excellent credit (700+ score) might choose an unsecured credit card with an interest rate of 12% APR and a ,000 credit limit.

**APR Figures**

Here are some approximate APR figures for secured and unsecured credit cards:

Secured Credit Cards:
+ Chase Freedom Unlimited: 15.99% – 22.99% (Variable)
+ Capital One Secured Mastercard: 14.99% – 24.99% (Variable)

Unsecured Credit Cards:
+ Citi Simplicity Card: 12.99% – 23.99% (Variable)
+ Discover it Cash Back: 10.99% – 21.99% (Variable)

Our finance research team tests credit cards independently. If you make a purchase through our links, we may earn a commission at no additional cost to you. View our tested picks.

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