What Is an Unsecured Credit Card?

How Does an Unsecured Credit Card Work?

Unsecured credit cards are revolving credit accounts that don't require any collateral. When you apply for an unsecured card, the issuer reviews your credit report, credit score and your financial details, such as your income and monthly expenses. These factors are used to help the card provider determine whether you qualify, your credit limit and your interest rate.

Once approved, you can make purchases up to your credit limit. As you pay down your balance, that credit becomes available again. You can borrow against your limit repeatedly without reapplying for credit.

At the end of your monthly billing cycle, the issuer sends you a statement showing all your transactions, the statement balance and the minimum amount due. If you pay your entire statement balance by the due date, you won't owe any interest. But if you carry, or "revolve," a balance to the next month, that unpaid amount will start accruing interest daily. Any new purchases you make will also accrue interest until you pay them off.

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Secured vs. Unsecured Credit Card

In many ways, unsecured and secured cards are indistinguishable. They're both revolving credit accounts, and you can't tell them apart just by looking at the cards.

However, the approval process is different. With secured cards, you must send the issuer a refundable security deposit upfront. The security deposit usually has a minimum and maximum amount, ranging from around $200 to $2,500. Usually, the amount you deposit is equal to your card's credit limit. The card issuer holds the deposit as collateral in case you stop making payments.

Generally, it's easier to get approved for a secured card because the required collateral reduces the card issuer's risk. It's the main reason why they're a popular option for those who are brand new to credit or trying to rebuild their credit.

By contrast, unsecured credit cards are more geared to applicants who have an established credit history. That's because the card issuer is taking a bigger risk if you don't pay your debt. But the vast majority of credit cards are unsecured, so you have more choices when it comes to card types, rewards, points and cash back programs. These cards usually offer lower APRs and higher borrowing limits.

Here's how they compare:

Learn more: Is a Secured Card or Unsecured Card Better for My Credit?

What Credit Score Is Required for an Unsecured Credit Card?

The credit score you'll need to qualify for a credit card typically depends on the type of card and the issuer. For example, you'll likely need a score in the good to excellent range (FICO^® Score^Θ of 670 and higher) to qualify for the best travel and rewards credit cards. You may qualify for credit cards with fair credit or bad credit, but interest rates may be higher.

Many credit card companies list their minimum credit score requirements, so you can see if you're likely to qualify before applying. Still, some issuers don't disclose minimum score requirements or may not have them at all.

Tip: Your credit score is only one factor card issuers consider when deciding whether to approve you for a new card. Even if you meet the minimum score requirement, you could still be denied if your income, debt level or employment status doesn't meet the issuer's standards.

Learn more: How to Get Approved for a Credit Card

Pros and Cons of Unsecured Credit Cards

Unsecured credit cards can offer lower rates and higher limits, but there are specific risks you need to consider first.

Who Should Consider an Unsecured Credit Card?

Getting an unsecured credit card could be a good option if:

• You have good to excellent credit. Higher credit scores tend to qualify for more competitive rates and higher limits. Generally, your score should be at least 670, but the higher, the better.
• You travel often. If you travel often, unsecured cards can be useful tools to garner airline miles, hotel credits and airport lounge access. Make sure the rewards you'll receive are greater than the card's annual fees.
• You want to earn cash back for your spending. Many unsecured credit cards offer higher cash back rates in select categories like groceries, gas or dining. Getting a card with incentives that match well with your spending habits could help you earn more on your everyday spending.
• You pay your card in full each month. By paying off your balance each month, you're effectively carrying an interest-free credit card. And you may be able to earn rewards or cash back on spending you'd do anyway without paying a dime in interest.
• You own a business. With an unsecured business credit card, you could earn rewards or cash back on business expenses like travel, office supplies and equipment purchases. These cards often have higher credit limits, which could give you more purchasing power than you'd have with a personal credit card.

Alternatives to Unsecured Credit Cards

If your credit score doesn't meet the threshold to qualify for an unsecured credit card, you still have other options to establish and build credit.

Secured Credit Cards

You can use secured cards just as you would an unsecured credit card, but you'll have to provide a deposit first. Your credit may improve if you make consistent, on-time payments and keep the balance low relative to the credit limit. If your score increases, you may be able to upgrade to an unsecured credit card and get your deposit back.

Authorized-User Cards

You can gain access to an unsecured credit card by becoming an authorized user on another person's account. You don't have to submit an application, and the card issuer doesn't pull your credit.

Before choosing this path, confirm the card issuer reports authorized-user activity to the credit bureaus, and the primary cardholder manages the card responsibly. Missed payments or a high balance could damage both of your credit scores.

Personal Loans

A personal loan may be a better option than a credit card if:

• You need to cover a large expense that could take months to pay off. As of August 2025, personal loans average 11.14% APR, which is significantly lower than the 22.83% average credit card rate, according to the latest Federal Reserve data. You'd also have a predictable payment schedule with a set payoff date.
• You want to consolidate debt. A debt consolidation loan allows you to combine high-interest debt from one or more credit cards into a loan with a lower rate. This type of personal loan usually offers a fixed interest rate and a higher borrowing limit than most credit cards, so you may be able to consolidate a larger amount.

Tip: If your debt is smaller, consider consolidating it with a 0% intro APR balance transfer credit card. Some cards offer up to 21 months interest-free, which might give you enough time to wipe out your balance without paying any finance charges.

Frequently Asked Questions

Check Your Credit Score Before Applying

If you want to get a new credit card, it's a good idea to check your credit first to see where you stand. Remember, once you submit your credit card application, it could result in a hard inquiry that could have a temporary negative affect on your credit score. Checking your score beforehand could help you gauge your odds of approval before applying.

You can get your FICO^® Score and credit report for free with Experian. By creating an account, you can see personalized credit card offers based on your credit file. Checking the offers won't hurt your credit, but it could help you find cards you're more likely to qualify for before you submit a formal application.