How Long Does It Take for a Secured Card To Become Unsecured?

Introduction

It’s a classic catch-22 scenario: you’re ready to build — or rebuild — credit, and you need credit card companies to do that. But they will only give you that chance if you can show a history of responsible credit usage … which may be a little difficult to accomplish without said credit card.

Secured credit card: enter stage right.

A secured credit card acts just like a typical unsecured card, except it’s backed by collateral — a one-time, refundable deposit made by the cardholder. If you default, the issuer will use this deposit to recoup any outstanding balance owed.

A secured card is a tried-and-true way to build positive credit history and increase your credit score. But if you have one, can it eventually become an unsecured card? And if so, how long does that take?

Does a Secured Card Ever Become Unsecured?

While a secured card itself doesn't actually transform into an unsecured card, you as the cardholder can graduate from secured to unsecured.

Just like any other credit card, if you use your secured card responsibly and always make timely payments, your credit will reap the benefits. And the better your credit, the better your chance of graduating to an unsecured card. Look at a secured card as a stepping stone to more credit in the future.

How Long Does It Take for a Secured Card To Become Unsecured?

It’s probably not the crystal-clear answer you’re looking for, but the time it takes to go from a secured card to an unsecured one varies for each person. Simply having a secured card doesn’t automatically qualify you for an unsecured card in “X” number of months. It can depend on several factors.

First, refer back to that “responsible credit card use” bit mentioned in the previous section. This is priority numero uno to build good credit. It’s a must. Gotta do it. And the more you practice these good credit habits, the quicker you may be upgrading the card in your wallet.

Also, where are you beginning this credit journey from? Are you starting with no credit or are you rebuilding an existing, poor credit history? How long it takes to build positive credit history could impact your secured-to-unsecured timeline. If you’re starting with a clean slate, it can take just a few months to build a good credit score. On the other hand, if you’ve got a poor credit history, it may take a little longer — especially if you have bankruptcies, foreclosures, collections, or a lot of late payments on your credit report. These sorts of things can take years before they drop off your credit report.

How to Graduate From a Secured Card to an Unsecured Card

This is quickly careening toward sounding like a broken record, but if you want to graduate to an unsecured card, practicing good credit habits is the name of the game:

• ✔ Use your card responsibly
• ✔ Don’t make purchases you really can’t afford
• ✔ Pay your bill on time, every time
• ✔ Keep your credit utilization ratio below 30%

These are all important to help send your credit in the right direction … Know them. Embrace them. Practice them. Your credit will thank you.

If your issuer feels you’re checking all of these boxes, and your credit history now proves it, they may offer you an unsecured card. Or you can proactively contact them and ask for one. You can also always apply for an unsecured card at any time if you feel that your credit history is now strong enough, but remember that applying for a new card can come with a hard inquiry, which typically knocks your credit score down a few points.

Bottom Line

Sure, everyone would prefer to have an unsecured credit card in their wallet. But sometimes, for one reason or another, that just may not be in the cards (pun intended). That’s where a secured card comes into play. And if you use it responsibly and pay your bills on time, you can find your way to that unsecured card in short order.

If you’d like a credit card designed to help you build your credit score when you make timely payments each month, see if you pre-qualify for an offering from Credit One Bank, including a secured card.