Most of the people have a credit card in their pocket. There are two types of credit cards secured and unsecured credit cards. Both types of credit cards have some common things & some key differences. The secured type credit card is similar to an unsecured type credit card, but the account holder has to make the least security deposit. The average limit of a security deposit is 200 USD, but it can be higher and lower depending upon the bank. Some types of credit card providers, like capital one, have a security deposit lower up to 99 USD. Secured cards are frequently marketed toward people willing to build or reconstruct their credit. As an outcome, the security deposit turns as collateral if you default on payments, but it’s refundable if you upgrade to another unsecured card or pay off your balance complete & close your money account. Account holders can spend money up to credit card limit which is equal to a security deposit. If the security deposit is USD 200, credit cardholders can spend up to 200 USD.
Actions that credit card holder takes with a secured card are reported to the three types of credit bureaus TransUnion, Experian & Equifax, so it’s vital to avoid maxing out the credit card and paying off the balance at the end of each month. So the option to choose a secured or unsecured credit card depends on the credit score. If the credit score is lower (below 580) or no credit score, the secured credit card is the best option. And if the credit score is higher (greater than 670) unsecured secured credit card is a suitable option. An unsecured credit card gives rewards on the spending of gas, groceries, dining bills. An unsecured credit card doesn’t require funding by the account holder.
Secure credit can help to rebuild a credit score, while Unsecured credit can charge a large amount of interest rate on lower credit scores. So according to financial condition & choice, the consumer can use secured or unsecured credit cards.