When rebuilding credit, you will encounter two types of cards: secured and unsecured. Understanding the difference helps you choose the right starting point based on your credit score and cash availability.
What Is a Secured Credit Card?
A secured credit card requires you to deposit cash as collateral before the account is opened. This deposit protects the issuer if you do not pay your bill. In most cases, your credit limit equals your deposit amount.
Examples of secured cards for bad credit:
- Discover it Secured — $49–$200 minimum deposit, $200+ credit line
- OpenSky Secured Visa — $200–$3,000 deposit, credit limit equals deposit
- Chime Credit Builder — No minimum deposit, spending limit equals your balance in the Secured Deposit Account
What Is an Unsecured Credit Card for Bad Credit?
An unsecured card requires no deposit. The issuer extends credit based on your credit profile, even if it is damaged. These cards typically have higher APRs and lower credit limits to compensate for the issuer’s higher risk.
Example of an unsecured card for bad credit:
- Capital One Platinum — No deposit, 28.99% variable APR, for fair credit (580+)
Credit Building: Is There a Difference?
No. Secured and unsecured cards report to the credit bureaus in exactly the same way. On-time payments with a secured card are as valuable to your credit score as on-time payments with an unsecured card. The bureaus do not distinguish between the two.
| Card | Annual Fee | APR | Deposit Required | Credit Check | Credit Limit Increase |
|---|---|---|---|---|---|
| Capital One Platinum | $0 | 28.99% variable | None (unsecured) | Yes | Automatic review at 6 months |
| Discover it Secured | $0 | See discover.com | $49–$200 minimum (unlocks $200+ line) | No score required | Monthly reviews after 7 months |
| OpenSky Secured Visa | $35/year | 23.89% variable | $200–$3,000 | None | Request after 6+ months |
| Chime Credit Builder | $0 | None (no interest) | No minimum | None | Increase by adding funds |
Source: Issuer websites, September 18, 2026. Verify current terms before applying.
Pros and Cons: Secured Cards
Pros:
- Easier to qualify for — some require no credit check at all
- Deposit limits your spending, reducing the risk of debt
- Many have $0 annual fees
- Some (like Discover) upgrade to unsecured and return deposit after good payment history
Cons:
- Upfront deposit required — $200 or more for most cards
- Deposit earns no interest while held as collateral (check your specific card — some do pay interest on the deposit)
- Lower credit limits until you increase the deposit
Pros and Cons: Unsecured Cards for Bad Credit
Pros:
- No deposit required
- Can qualify with fair credit (580+)
- Same credit-building benefit as secured cards
Cons:
- Harder to qualify for — credit check required
- APRs tend to be higher
- May have lower initial credit limits
Which Should You Choose?
Choose a secured card if:
- Your credit score is below 580
- You have been turned down for unsecured cards
- You want near-guaranteed approval (OpenSky, Chime)
- You prefer to limit spending to what you have deposited
Choose an unsecured card if:
- Your credit score is 580 or above
- You cannot spare $200 or more for a deposit
- You want the flexibility of a traditional revolving credit line
Check your approval odds for the Capital One Platinum card: See if you qualify with no impact to your credit score.
Apply for the OpenSky Secured Visa: No credit check required — approval based on your deposit.
Terms verified at issuer websites on September 18, 2026. Card terms change frequently — verify current rates and fees at the issuer’s website before applying.