Secured Vs Unsecured Credit Cards: Which Should You Get First

**Secure or Unsecured? Choosing the Right Credit Card for Your Financial Future**

When it comes to building credit, choosing the right credit card can be a daunting task. With so many options available, it’s essential to understand the differences between secured and unsecured credit cards before making a decision. In this article, we’ll break down the key differences, financial details, real examples, APR figures, and provide actionable advice on which type of credit card is best suited for you.

**Unsecured Credit Cards: A Security Deposit**

An unsecured credit card is issued to individuals with good or poor credit history. The cardholder promises to pay back the balance in full each month, minus any interest charges. In exchange, the issuer reports a payment history to the credit bureaus and may even offer additional benefits, such as rewards programs.

To qualify for an unsecured credit card, you typically need to have a solid credit score (usually 700+ FICO) and a stable income. Here are some common requirements:

* Credit score: 700+
* Income: $25,000-$50,000 per year
* Employment history: At least 2 years

For example, if you have a credit score of 720 and an annual income of $40,000, you may qualify for a secured Visa or Mastercard.

**Secured Credit Cards: A Security Deposit on Your Credit Line**

A secured credit card is issued to individuals who don’t have a good credit history but still want to establish or rebuild their credit. The issuer deposits funds into your account as collateral and reports the payment history to the credit bureaus. To qualify, you typically need:

* No public record of late payments or bankruptcies
* A stable income
* A decent employment history

Here are some common requirements for secured credit cards:

* Credit score: 600-699 FICO
* Income: $10,000-$25,000 per year
* Employment history: At least 1 year

For example, if you have a credit score of 650 and an annual income of $20,000, you may qualify for a secured Visa or Mastercard.

**APR Figures: What to Expect**

The Annual Percentage Rate (APR) on unsecured credit cards can range from 12% to 23%, while secured credit cards typically have lower APRs. Here are some approximate APR figures:

* Unsecured credit card: 14.99%-20%
* Secured