How to Upgrade Your Secured Credit Card

By Steven Shaw on 7/31/2014

Credit Cards

How to Upgrade Your Secured Credit Card

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When people are struggling to rebuild their credit, a secured card can offer them the opportunity to qualify for a credit card and establish a positive credit history. Unfortunately, secured cards also have several drawbacks compared with standard credit cards. For example, secured cards always require a refundable deposit that is held by the card issuer, and nearly all secured cards charge an annual fee. In fact, there are many secured cards that charge a monthly fee. Also, secured cards tend to offer fewer benefits such as purchase protection policies and travel perks.

Eventually, secured card users are going to want to graduate to standard, non-secured credit cards to enjoy some of features they have been missing. If you are a secured credit card user, here is how you can get there:

1. Make sure you pay all of your bills on time. The only way to rebuild your credit and move up to a standard credit card is to establish a strong payment history. The benefit of most secured cards is that they report your payment history to the major consumer credit bureaus, but that will be a drawback if you make your payments late or miss them altogether. Further, you should be extra careful to pay all of your bills on time, not just your credit cards.

2. Pay off your balance. Making on-time payments is only part of your journey to a good credit score; you also need to stay out of debt. Even though a secured card will require a deposit, any balance you carry on your secured card will appear as debt on your credit report. Paying your balance in full each month will help your credit score and allow you to avoid interest charges.

3. Track your progress. Any goal you want to achieve will be easier if you can see the results of your effort. You can use’s free credit tracking tool to watch your credit improve over time. In addition, many credit card issuers are now including a free FICO score online and on cardholders’ monthly statements.

4. Wait a year. In most cases, secured credit card users will need a year’s worth of payment history in order to improve their credit scores enough to qualify for a standard credit card. So when your secured card comes up for renewal, and the annual fee is due, this is an excellent time to start looking for a standard credit card to apply for.

5. Contact your secured card issuer. If the bank that issued your secured card also issues standard credit cards, this can be a great place to start. This bank will already be familiar with your payment history and will likely want to keep you as a customer. Give your bank a call, and let them know that you are interested in moving up to a standard credit card, and see what their representatives recommend.

6. Speak with your retail bank. If you have a checking or savings account at a bank other than the one that issued your secured card, this is another institution that is more likely to offer you a standard credit card. Give them a call, or stop by and speak to someone about your credit history and your desire for a standard credit card.

7. Apply for cards offered to those with “fair” or “average” credit. When you are looking to move up from a secured card to a standard credit card, the last thing you want is a rejection. So stay away from the high-end travel reward cards that are only for those with the highest credit scores, and look for products specifically offered to those in the middle of the credit score range. For example, Capital One offers several credit cards for those with average credit, which it views as those with a limited credit history and those who have defaulted on loans within the past five years.

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Secured Credit Card