When choosing a credit card, you are faced with various options, from benefits and fees to the need for a deposit as security. 

This choice can be crucial for your financial planning and for building a good credit history. 

In this article, we will explore the differences between secured and unsecured credit cards, so you can make the best decision for your needs. 

Follow along to understand what secured and unsecured credit cards are and discover what you should do to choose the best credit card for you.

So, what is an unsecured credit card?

Woman choosing between Secured and Unsecured Credit Cards.

An unsecured credit card is a type of credit card that does not require a security deposit to be issued. 

Unlike secured credit cards, where you need to deposit an amount equivalent to the desired credit limit, unsecured cards are based on your credit history and income. 

In other words, it is a card that you apply for and is issued based on your financial life, considering your entire history, income, and ability to pay. It is the standard card offered by banks.

Better understand how it works

Financial institutions that issue unsecured credit cards evaluate your credit history and income to determine if you are eligible for a card and what your credit limit will be. 

This assessment is done through a check on your credit report, analysis of your income, and other factors.

 You do not need to immobilize an amount to access credit. In general, they offer higher credit limits than secured cards, and you have more options for benefits. 

You can find cards with cashback programs, points, insurance, and other benefits. They are more widely accepted in stores and establishments. 

However, it is important to note that they are more difficult to obtain. If you do not have a good credit history or income, it may be difficult to be approved for an unsecured card. 

Interest rates may be higher than those for secured cards, and the initial credit limit may be low. 

Unsecured credit cards are recommended for those with a good credit history and income who are looking for a card with more flexibility and benefits.

What is a secured credit card?

A secured credit card is a type of credit card that requires a security deposit to be issued. 

This deposit acts as collateral for the financial institution in case you fail to pay your bills. 

In other words, to have a limit, you need to make a security deposit, which will release the amount for you to use on the credit card. 

Unlike an unsecured card, this requires you to make the deposit to release the desired limit for use on your credit card.

Understanding how it works

A secured credit card is a great option for those looking to build or improve their credit history, or for those who do not have formal income. 

In other words, it is an easier card to obtain. Unlike traditional cards, it requires a security deposit that serves as security for the financial institution in case of default. 

Here’s how the process works: The deposit amount usually determines the available credit limit. The money is unavailable while you use the card. 

The amount is refunded when you cancel the card and settle all outstanding balances. Credit analysis is more flexible because the deposit guarantees payment. 

People with a negative credit history or without formal income can be approved.

Which one is the best option?

The choice between a secured and unsecured credit card depends on your financial goals and credit history.


Secured Credit Card

Unsecured Credit Card

Security Deposit

Required (usually equivalent to the credit limit)

Not required

Credit Limit

Usually lower (defined by the deposit amount)Accountant

Usually higher

Interest Rates

May be higher

May be lower

Annual Fee

May be charged

May be charged


Fewer options

More options (cashback, points, insurance, etc.)

Approval Ease

Easier (ideal for those with no credit history)

More difficult (requires good credit history and income)

Credit History Building

Yes (pay on time to build a good history)

Yes (pay on time to maintain a good history)

By making these comparisons, you’ll be able to analyze and choose between secured and unsecured credit cards, so that you can have the card that best suits your needs.

With that said, it’s important to highlight that there’s no one-size-fits-all answer for which type of card is better.

The best choice depends on your financial goals and credit history. Evaluate your options carefully and compare different offers before making a decision.

Did you enjoy learning about secured and unsecured cards? Choose the one that best fits you and enjoy your credit.

And check out more tips on our website.