Secured Vs Unsecured Credit Cards: Which Should You Get First

**Choosing the Right Credit Card: Secured or Unsecured?**

When it comes to building credit, choosing the right credit card can be a daunting task. With numerous options available, it’s essential to understand the differences between secured and unsecured credit cards to make an informed decision. In this article, we’ll explore the pros and cons of each type of credit card, including financial details, APR figures, and actionable advice.

**Secured Credit Cards**

A secured credit card is a type of credit card that requires a security deposit, which becomes your credit limit. This type of card is ideal for individuals with poor or no credit history, as it provides an opportunity to establish or rebuild credit. Secured credit cards typically have more lenient APRs and stricter credit score requirements compared to unsecured credit cards.

Pros:

* Build credit by using the card responsibly
* Lower initial deposit requirement (often 00-00)
* More flexible repayment terms

Cons:

* Higher interest rates compared to unsecured credit cards
* Limited credit limit, which can impact budgeting
* May require a security deposit, which can be withdrawn if you miss payments

Real Example: **Citi Secured Mastercard**

The Citi Secured Mastercard is an excellent example of a secured credit card. With an annual fee of 9 and a 24.99% APR, this card requires a 00-99 security deposit. To maintain the card’s benefits, you must make on-time payments and keep your credit utilization ratio below 30%. This card is ideal for those with poor or no credit history, as it provides a chance to establish credit.

**Unsecured Credit Cards**

An unsecured credit card, also known as an unimpressed one, has no security deposit required. However, this type of card typically comes with higher APRs and stricter credit score requirements.

Pros:

* Lower initial deposit requirement (often /bin/sh-00)
* No security deposit to worry about
* More flexibility in repayment terms

Cons:

* Higher interest rates compared to secured credit cards
* Stricter credit score requirements
* May require a higher credit limit, which can impact budgeting

Real Example: **American Express Blue Cash Preferred**

The American Express Blue Cash Preferred is an excellent example of an unsecured credit card. With an annual fee of /bin/sh first year, then 5 thereafter, this card offers 6% cash

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Related: Annual Fees Vs Rewards: How To Calculate If A Card Is Worth