Last Updated: January 21, 2024
3 min read
Key points about: switching from a secured credit card to an unsecured card
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Starting with a secured credit card may help you build credit history and qualify for an unsecured card later.
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Keeping your credit utilization low on your secured card is key to proving your creditworthiness.
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With Discover, you could upgrade to an unsecured card after 6 consecutive on-time payments and maintaining good statuson all your credit accounts.1
Changing a secured credit card to an unsecured credit card is a serious financial accomplishment. Starting with a secured card usually means you have little or no credit history, or you're working to rebuild your credit history. Learn the steps to demonstrate responsible use of your secured credit card and how to make the switch to an unsecured card.
Using your secured credit card responsibly may allow you to graduate to an unsecured credit card
Before you can go from a secured credit card to an unsecured card, you need to demonstrate that you use credit responsibly. Use your card regularly but try to keep the amounts you charge to a small percentage of your credit limit. This is because having a lower debt utilization is considered positive when factored into your FICO®Credit Score.2
It’s also very important to pay your bills on time because missed or late payments will likely negatively affect your credit score.
How long does it take to go from a secured credit card to unsecured?
Some secured credit card issuers may let you convert to an unsecured account after you’ve built credit history and displayed a pattern of paying bills on time.
Did you know?
To build enough credit history for an unsecured card, you’ll have to use your secured card responsibly for a certain time frame. For example, if you have aDiscoverit®Secured Credit Card, after 7 months, we begin automatic monthly account reviews to see if you qualify to upgrade to an 'unsecured' card and get your deposit back.1
If you’re unsure about your card issuer’s timeline for graduating to an unsecured card, you may want to contact them and discuss options.
How to use your new unsecured credit card to build credit history
You’ve already demonstrated creditworthiness, which can help open up more financial opportunities in the future. Here are three simple tips that build on those habits that can help yougraduate from a secured to an unsecured credit card:
Avoid opening multiple credit cards at once
Now that you have established credit, you might notice an uptick in the amount of pre-approved card offers you receive.
While it can be flattering to see pre-approved credit card offers pour in, keep in mind that opening several credit cards in a short time frame may cause lenders to perceive you as a riskier borrower. Resist the temptation to jump at every credit card offer promising free cash, bonus rewards, complimentary airfare, and low interest rates.After you build your credit history and improve your credit score over time, you’ll qualify for a wider range of credit cards.
New accounts could lower your average account age, which could have a larger effect on yourcredit scoreif you're new to credit.
Don’t use all of your credit
To maintain good credit—and perhapshelp your credit scoreeven more—keep your overall balances as low as possible. If your credit utilization ratio is too high, your credit score may be negatively affected. To make sure you keep your balances in check, set up account balance alerts and automatic payments.
Unsecured credit cards take more discipline than secured cards
Unsecured credit cards make it easier to spend thansecured credit cards. Credit limits tend to be higher, and creditors are more likely to increase your available credit the longer you own the unsecured card and demonstrate responsible use.
It’s important to stay in control of your personal finances by using available tools (think payment reminders andaccount alerts) that help maintain your financial discipline once you have an unsecured credit card.
