How to Change a Secured to an Unsecured Credit Card
Maintain your current financial relationship.You’re more likely to get an unsecured credit card from a company that already knows all about your credit history and has done business with you in the past., Ask your financial institution if it is...
Step-by-Step Guide
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Step 1: Maintain your current financial relationship.You’re more likely to get an unsecured credit card from a company that already knows all about your credit history and has done business with you in the past.
Assuming you have a good working relationship with the company or financial institution that issued you your secured credit card, you should apply for your unsecured credit card with them, as well. -
Step 2: Ask your financial institution if it is possible to convert your card.Call your financial institution
Depending on the institution’s rules, you might need to fill out some paperwork, so going in person might be the best option.
If you find it is not possible to convert your card to an unsecured card, you will have to replace your secured card with a new unsecured card.
Talk to your existing card issuer about your doing so.
Request that your card number remain the same if you convert your card.If your card number remains the same when you convert your secured card into an unsecured card, you’ll be able to smoothly transfer recurring payments onto your new unsecured card, and won’t have to suffer the dip in your credit score that you would when canceling the secured card, or opening a new card. , Know your lender's policies.
Different lenders have different rules for their lines of credit.
Just as you did when opening your secured credit card, you should investigate your lender’s policies regarding the fine print of the unsecured credit card, including the card’s minimum payments, interest rates, and late fees.
This information will help you choose the best unsecured credit card for you.
Research your bank or lender's criteria for obtaining an unsecured credit card.
You will need to be a U.S. citizen and meet other institution-specific criteria to apply for a card change.
Try to get the lowest late fees, minimum payments, and interest rate possible.
These are usually non-negotiable, but you should ask anyway just in case your institution is more lenient. , The type of fee-free card you get depends on your credit score.
If your score is above 700, choose the best cash-back credit card — in other words, the card with the lowest interest rate, minimum payment requirements, and no fees.
If your score is below 700, you’ll be more limited.
Credit cards issued by department stores should be fee-free, so contact a major store (like Target, for instance) for more information about their credit card program. , How you use your credit card (or how you want to use your credit card) should guide your decision process when selecting your new unsecured credit card.There are a dizzying variety of cards available.
Think about your spending style and what you usually use your credit cards for to choose the best one for you.
If you sometimes have a balance on your secured credit card, try to get a card with a low interest rate and APR.
If you travel a lot and have a high (700 or above) credit score, you should get a travel card that rewards you with free air miles when you spend. , Canceling credit cards hurts your credit score.
If you cancel your credit card right before applying for an unsecured card, you might push your credit score down past the point where you’d be eligible to obtain one.Having a long credit history gives the new credit card issuer more data to look at, and makes them feel more comfortable about extending an unsecured card to you.
Instead of canceling the card, use it once a month for a small purchase, then pay it off immediately.
Talk to the lender about reducing your deposit. , When applying for a secured credit card, you’ll need to provide a security deposit, sometimes up to $10,000.
This money backs your credit card and provides you with a maximum credit limit.
After upgrading to an unsecured credit card, however, you must be sure to get your security deposit back.Talk to your financial institution or creditor about how to do so.
If a bank or credit union issued you your card, they’ll probably deposit the money in your account.
If you got the card directly from a credit card company, they’ll probably send you a check, or put the money toward your credit card card.
You might get the runaround from your card issuer.
Be persistent and insist on getting the deposit back. -
Step 3: or go in person
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Step 4: to inquire about the process of converting your card from secured to unsecured.
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Step 5: Understand your lender’s policies.You might need to talk to your credit card company directly
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Step 6: or the institution where you want to obtain the unsecured card.
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Step 7: Get a card without fees.If you have a card with fees
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Step 8: you’ll end up paying extra just to use it (and could even end up paying a fee if you don’t use it enough).
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Step 9: Choose a card that fits your spending style.
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Step 10: Don’t cancel your secured card right away if you are unable to convert your card.
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Step 11: Recover your security deposit.
Detailed Guide
Assuming you have a good working relationship with the company or financial institution that issued you your secured credit card, you should apply for your unsecured credit card with them, as well.
Depending on the institution’s rules, you might need to fill out some paperwork, so going in person might be the best option.
If you find it is not possible to convert your card to an unsecured card, you will have to replace your secured card with a new unsecured card.
Talk to your existing card issuer about your doing so.
Request that your card number remain the same if you convert your card.If your card number remains the same when you convert your secured card into an unsecured card, you’ll be able to smoothly transfer recurring payments onto your new unsecured card, and won’t have to suffer the dip in your credit score that you would when canceling the secured card, or opening a new card. , Know your lender's policies.
Different lenders have different rules for their lines of credit.
Just as you did when opening your secured credit card, you should investigate your lender’s policies regarding the fine print of the unsecured credit card, including the card’s minimum payments, interest rates, and late fees.
This information will help you choose the best unsecured credit card for you.
Research your bank or lender's criteria for obtaining an unsecured credit card.
You will need to be a U.S. citizen and meet other institution-specific criteria to apply for a card change.
Try to get the lowest late fees, minimum payments, and interest rate possible.
These are usually non-negotiable, but you should ask anyway just in case your institution is more lenient. , The type of fee-free card you get depends on your credit score.
If your score is above 700, choose the best cash-back credit card — in other words, the card with the lowest interest rate, minimum payment requirements, and no fees.
If your score is below 700, you’ll be more limited.
Credit cards issued by department stores should be fee-free, so contact a major store (like Target, for instance) for more information about their credit card program. , How you use your credit card (or how you want to use your credit card) should guide your decision process when selecting your new unsecured credit card.There are a dizzying variety of cards available.
Think about your spending style and what you usually use your credit cards for to choose the best one for you.
If you sometimes have a balance on your secured credit card, try to get a card with a low interest rate and APR.
If you travel a lot and have a high (700 or above) credit score, you should get a travel card that rewards you with free air miles when you spend. , Canceling credit cards hurts your credit score.
If you cancel your credit card right before applying for an unsecured card, you might push your credit score down past the point where you’d be eligible to obtain one.Having a long credit history gives the new credit card issuer more data to look at, and makes them feel more comfortable about extending an unsecured card to you.
Instead of canceling the card, use it once a month for a small purchase, then pay it off immediately.
Talk to the lender about reducing your deposit. , When applying for a secured credit card, you’ll need to provide a security deposit, sometimes up to $10,000.
This money backs your credit card and provides you with a maximum credit limit.
After upgrading to an unsecured credit card, however, you must be sure to get your security deposit back.Talk to your financial institution or creditor about how to do so.
If a bank or credit union issued you your card, they’ll probably deposit the money in your account.
If you got the card directly from a credit card company, they’ll probably send you a check, or put the money toward your credit card card.
You might get the runaround from your card issuer.
Be persistent and insist on getting the deposit back.
About the Author
Doris Richardson
Writer and educator with a focus on practical lifestyle knowledge.
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