Updated: Aug 31, 2023

When to Make the Switch From a Secured Credit Card to a Unsecured Card?

Do you know when it is time to switch from a secured credit card to an unsecured credit card? We'll show you how to find out for yourself.
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You were told that to build or repair your credit score, a secured credit card was the right way to do it -- so you got one.

Now that you’ve had a secured credit card for some time now, you feel that you deserve to have a regular, unsecured credit card.

We’ll show you how to find out when you are actually ready for the transition and how you should go about qualifying for an unsecured credit card.

Prepping to drop the secured credit card

Typically, you can begin to think about getting a real credit card after 12 to 18 months with a secured card -- you may need another year or so if your credit is awful.

Other signs that you may qualify for an unsecured card include:

  • You are getting credit card offers in the mail. Card issuers regularly look at consumer credit reports to market credit card offers.
  • Your secured card issuer is raising your limits without more deposits. It's proof that you are exhibiting improved credit behavior. (The does this.)
  • Your secured card issuer is offering to convert you to an unsecured card. Your issuer feels you are ready. (See MyBankTracker’s list of best secured credit cards to see which ones offer a graduation program.)

Even if you have no clue whether or not your credit is good enough, you can check for yourself.

Good credit management is what you need to prove to lenders. So, the first question to ask yourself is, “Have I ever made a late payment or missed a payment on the card?”

If your answer is “yes,” your credit history probably isn’t yet good enough to get an unsecured credit card. In fact, your credit profile may appear worse than before.

If your answer is “no,” then you are already well on your way. F

rankly, there is no credit behavior better than consistent on-time payments when you’re trying to convince lenders that you are creditworthy.

Before you begin looking for unsecured credit cards, you want to confirm that your on-time payments are being recorded accurately at the three major U.S. credit bureaus.

The best way to do this is to retrieve your free credit reports -- one each from Equifax, Experian, and TransUnion -- at AnnualCreditReport.com.

Actually, up until now, you should have been pulling your credit reports regularly to monitor your progress.

Note: We normally recommend that you split up your 3 free credit reports every year -- 4 months apart. But, in this instance, you’d want to see that your secured credit card account history was reported correctly to all three credit bureaus before applying for an unsecured card.

Once you see that your credit profile looks good on all credit reports, your next step is to purchase a FICO credit score, which is the current industry standard for measuring someone’s creditworthiness.

One credit score costs about $20 while three credit scores will cost $50.

We think you’d be okay with just one, as long as you checked that the information on your credit reports is accurate.

You are looking for a FICO score of 630 and above. Once you reach that threshold, you have a good chance of qualifying for an unsecured credit card.

Picking your next credit card

When you’re choosing your unsecured credit card, evaluate your habits with your secured credit card to determine which one best fits you. Here are our recommendations based on how you've been using your secured card:

if you occasionally carried a balance, because a low APR credit card will minimize interest payments.

Read Simmons Visa Card Editor's Review

if you made it a goal to pay off your monthly balance in full because you’d benefit from a rewards or cash back credit card. Since you’re not paying interest charges, the interest rate doesn’t matter here.

Read Citi Double Cash Card Editor's Review

if you travel often and don't mind the annual fees, which you'll make up for by taking advantage of the travel benefits.

Read Capital One Venture Rewards Credit Card Editor's Review

When it comes to perk-filled travel credit cards, we suggest that you bolster your credit scores above 700 to improve your chances of qualifying.

However, even if you qualify for an unsecured card with less-than-stellar credit, expect to receive a small credit limit and higher-than-normal APR. (Don't worry though, you can work on raising credit limits and lower interest rates over time.)

Transitioning to an unsecured card

When you’ve found the unsecured credit card you want, go ahead and apply for it.

Right after being approved for an unsecured card, your first reaction may be to close your secured credit card account. But, we advise against that.

You should first ensure any recurring payments charged to your secured credit card is moved to your unsecured card.

Then, go a few months without the secured credit card to reaffirm that your new financial setup is working fine.

Then, you may proceed to close the secured credit card account -- don’t forget to take back your security deposit.

You may be concerned about the effect that a closed account will have on your credit scores.

Yes, closing the secured credit card will hurt your credit temporarily because you are losing that credit limit and reduce the average age of your credit accounts.

Lower credit limits and a shorter average age of accounts tend to contribute to lower credit scores. Now you can see why we advised you to open the unsecured credit card first!

However, in time, your credit score will recover -- just keep on making those payments on time, as you've been doing.