How to Make a Secured Credit Card Unsecured

A secured credit card helps individuals establish or rebuild credit. Unlike unsecured cards, it requires a cash deposit that typically acts as the credit limit. This deposit provides security for the issuer, reducing risk for those with limited or damaged credit profiles. Many secured cardholders aim to demonstrate responsible financial behavior to transition their account to unsecured status. This transition often involves the return of their security deposit and may lead to an increased credit limit, reflecting improved creditworthiness.

Meeting Eligibility Requirements

Achieving eligibility for an unsecured credit card requires consistent financial responsibility over time. Lenders assess your credit score, which should ideally reach a “good” range (FICO score of 670 to 739 or higher). Consistent, timely payments on your secured card and all other debts directly improve this score, as payment history accounts for about 35% of a FICO score. Late payments severely impact credit, remaining on your report for up to seven years.

Lenders also examine your payment history, requiring consistent on-time payments. This means making at least the minimum payment, or ideally the full balance, by the due date each month. The age of your account also plays a role; many issuers prefer to see at least 6 to 12 months of responsible management with the secured card before considering an upgrade.

Another element is your credit utilization ratio, which is the amount of credit used compared to your total available credit. Maintaining this ratio below 30% across all credit lines, or ideally even lower, signals to lenders that you are not over-reliant on borrowed funds. Regularly monitoring your credit reports, accessible weekly for free from AnnualCreditReport.com, allows you to track progress and identify inaccuracies. Reviewing your credit score through your card issuer or other financial services can help you gauge readiness for an upgrade.

Steps to Request an Upgrade

Once you meet the eligibility criteria, proactively engage with your credit card issuer to explore upgrade possibilities. The most common method is contacting their customer service department. This can be done via phone, through a secure message portal within your online banking account, or sometimes through an online chat feature. Be prepared to clearly state your intention, such as, “I would like to inquire about transitioning my secured credit card to an unsecured product.”

During this conversation, the issuer may ask for information to verify your identity and assess your financial standing. This could include confirming personal details, updated employment information, or disclosing your current income. This information helps them evaluate your creditworthiness without a security deposit. The representative will guide you through their application or review process for an upgrade.

Not all credit card issuers offer a direct path to upgrade a secured card to an unsecured one within the same product line. Some may require you to apply for a new unsecured card entirely. If a formal application is necessary, be aware it might involve a credit inquiry, which can temporarily affect your credit score. Understanding your issuer’s policies beforehand can help manage expectations throughout this process.

Understanding the Outcome

Following your upgrade request, the credit card issuer will notify you of their decision. This notification may arrive via mail, email, or phone call, usually within a few weeks. If your upgrade request is approved, an immediate benefit is the refund of your security deposit. This refund is typically processed within one to two billing cycles, or approximately 7 to 14 business days to a month, and is often issued as a direct deposit to your linked bank account or as a check.

Upon conversion, your existing account may be updated with new terms, or a new card with a new account number might be issued. In most cases, the account’s history, including its age, will be preserved on your credit report, which benefits your credit score. Your credit limit may also be adjusted; it could remain the same, increase, or decrease, depending on the issuer’s final assessment of your credit profile.

If your upgrade request is denied, ask the issuer for the specific reasons. This feedback pinpoints areas where further credit building efforts are needed, such as reducing debt or extending positive payment history. You can then focus on improving these aspects and consider reapplying for an unsecured card later, often after another 6 to 12 months of responsible credit management.