Secured Vs Unsecured Credit Cards: Which Should You Get First

**Secured vs Unsecured Credit Cards: A Financial Guide to Making an Informed Decision**

When it comes to building credit, choosing the right type of credit card can be a daunting task. Two popular options are secured credit cards and unsecured credit cards. But which one should you get first? In this article, we’ll break down the differences between these two types of credit cards, analyzing financial details, APR figures, and real examples 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, which becomes the basis for your credit limit. To qualify for a secured credit card, you’ll typically need to provide proof of income and employment. The security deposit will be returned to you once you’ve met the minimum payment requirements and have built a positive credit history.

**Unsecured Credit Cards**

An unsecured credit card, on the other hand, offers a revolving line of credit without any initial deposit requirement. You can apply for an unsecured credit card with good or bad credit, but the issuer may consider additional factors such as income, employment, and payment history when approving your application.

**Financial Details**

* APR: Unsecured credit cards typically have an APR ranging from 12% to 24%, while secured credit cards usually have an APR of 10% to 20%. For example:
+ Discover it Secured has an APR of 11.99% – 22.49%
+ Capital One Secured Mastercard has an APR of 18.74% – 23.74%
* Credit limits: Unsecured credit cards typically have lower credit limits, ranging from $500 to $2,000. Secured credit cards often have higher credit limits, up to $5,000 or more.
* Fees: Unsecured credit cards may charge annual fees, late payment fees, and foreign transaction fees. Secured credit cards usually have no annual fee.

**Real Examples**

Let’s take a look at two real examples:

* **Example 1:** Rachel applies for an unsecured credit card with good credit, hoping to build up her credit score. She has a monthly income of $4,000 and a credit score of 720. After meeting the minimum payment requirements, Rachel is approved for a $2,000 credit limit.
+ APR: 12%
+ Annual fee: $50
* **Example 2:** David applies for a secured