Graduating from Secured to Unsecured Cards

Understanding Secured Card Graduation

Secured vs. Unsecured Credit Cards: A secured credit card is backed by a cash deposit you pay upfront, whereas an unsecured credit card requires no collateral. For anyone building or rebuilding credit, secured cards are a stepping stone. The ultimate goal is to “graduate” from a secured to an unsecured card – a credit-building milestone where your card issuer refunds your deposit and lets you continue with a regular unsecured card. This graduation not only marks improved creditworthiness, but it also means you’ve proven yourself with on-time payments and responsible card use. Many people search for the best secured credit card that graduates because it saves the hassle of opening a new account. In fact, some top secured cards will automatically upgrade you after a set period of good behavior, making them ideal choices for credit builders. These cards grow with you – sparing you an extra credit inquiry and allowing you to keep the same account (which helps your credit age).

Pro Tip: Choose a secured card that offers an automatic upgrade path. This way, you won’t need a new application later, helping preserve your account age and avoid unnecessary hard pulls on your credit report.

What Does It Mean to ‘Graduate’ From a Secured Card?

To graduate from a secured card means your issuer transitions your account to an unsecured card and returns your security deposit. In other words, your credit line is no longer secured by collateral. Graduation typically happens after you demonstrate responsible use for a certain period – often about 6 to 12 months of on-time payments. For example, the Discover it® Secured Card can begin automatic monthly reviews after just seven months of prompt payments, while some issuers (like Citi) wait about 18 months before considering an upgrade. Each issuer has its own criteria, but common requirements include consistently paying on time and keeping your card balance low relative to the limit (credit utilization). Essentially, you need to build enough positive history that your credit score improves and the bank trusts you with an unsecured line of credit.

Graduation is a key milestone because it reflects your improved credit health. When your secured card graduates, you get your deposit back and often continue with the same account as an unsecured card. This is beneficial for your credit score, since you maintain the longevity of that account and its good payment history. It’s also convenient – there’s no need to reapply for a new card or close the old one. Not all secured cards graduate automatically, so it’s wise to choose one of the secured credit cards that grow with you (i.e. have an upgrade program) if your goal is to seamlessly transition to unsecured credit.

Top Picks: Best Secured Credit Cards That Graduate

Below is our hand-picked comparison of the top secured credit cards known for upgrading to unsecured. These cards not only help you build credit but also spare you the trouble of reapplying, since they can convert to an unsecured version after you meet the issuer’s criteria. Our “best secured credit card that graduates” is highlighted as the Top Choice. All listed cards report to all three major credit bureaus, so your positive payment history counts.

Top Choice – Discover it® Secured Credit Card: This popular secured card checks all the boxes for a card that grows with you.

Discover it® Secured Credit Card (Top Choice)

The Discover it Secured Credit Card is our top pick for building credit because of its easy path to graduation and rewarding perks. With no annual fee and a modest $200 refundable deposit, it’s accessible to beginners. Discover is one of the few issuers that automatically reviews your account starting at 7 months to see if you qualify to upgrade to an unsecured card. That means after about seven on-time payments, you could get your full deposit back and transition to a regular Discover card – a speedy timeline that makes it perhaps the best secured credit card that graduates quickly.

In the meantime, you earn cash back rewards – a rarity among secured cards. You get 2% back at gas stations and restaurants (on up to $1,000 in combined purchases quarterly) and 1% on everything else. Plus, Discover will match all the cash back you’ve earned at the end of your first year, effectively doubling your rewards. This generous feature, along with automatic graduation, gives new cardholders extra incentive to use the card responsibly. Pro Tip: Set up alerts or automatic payments – Discover forgives your first late fee, but on-time payments are crucial for fast graduation. Once graduated, you’ll continue to enjoy Discover’s benefits (like no foreign transaction fees and free FICO score) without the need to open a new account. If building credit is your goal, the Discover it Secured offers a supportive journey from day one to graduation. It’s an excellent card that truly “grows with you,” making it our top recommendation.

Capital One Quicksilver Secured Cash Rewards Credit Card

The Capital One Quicksilver Secured is a great choice for those who want flat-rate cashback and a chance to upgrade with Capital One over time. Like its unsecured counterpart, this card earns 1.5% cash back on every purchase with no caps or categories. There’s no annual fee, and the minimum security deposit is $200 (refundable) for a $200 starting credit line. One unique aspect is Capital One’s flexible deposit policy – depending on your creditworthiness, you might be allowed to put down less than your full credit line (for example, some applicants qualify for a $200 line with just $49 or $99 deposit on the Platinum Secured). Even if you need the full $200 deposit, the barrier to entry is low.

Importantly, Capital One will start reviewing your account after six months of on-time payments to see if you qualify for a higher credit limit or even an upgrade to an unsecured card. Many users report credit line increases at the six-month mark, which is a positive sign on your way to graduation. While Capital One doesn’t guarantee an automatic product change, you can request graduation if your credit score has improved. Using this card responsibly (paying in full each month and keeping utilization low) can also pave the way to other Capital One unsecured cards in the Quicksilver family. Light encouragement: This card is ideal if you prefer a simple, unsecured card upgrade process and straightforward rewards. By earning cash back on everyday spending, you get value now, and with good habits, you’ll graduate to an unsecured Capital One card and get your deposit back – all without ever paying an annual fee.

Bank of America® Travel Rewards Secured Credit Card

The Bank of America Travel Rewards Secured Card is a top-notch option for travelers building credit, offering flat-rate points and a clear path to graduation. This card requires a slightly higher minimum deposit ($300) but comes with a $0 annual fee and a generous rewards program: 1.5 points per $1 spent on all purchases, with no limits. Those points can be redeemed for travel statement credits, which essentially makes this a travel cashback card for beginners. Bank of America will periodically review your account (starting around 12 months of tenure) to determine if you’re eligible to graduate to an unsecured card. Upon graduation, not only is your deposit refunded, but your card seamlessly converts to the standard Bank of America® Travel Rewards credit card (unsecured). This means you keep the same account number and continue earning 1.5× points on a now-unsecured line of credit – without a new application.

Bank of America reports to all three bureaus, so using this card responsibly will steadily improve your credit score. If you also bank with BofA, you may eventually qualify for their Preferred Rewards program, boosting your rewards rate. Why we like it: This secured card grows with you into a travel rewards card, perfect if you plan to travel or simply prefer points over cash back. It’s essentially training wheels for one of the best travel credit cards for no annual fee. Just make sure to pay on time and keep balances low; Bank of America tends to graduate cardholders who demonstrate credit improvement and stable finances. In short, if you want a secured card upgrade that leaves you with a solid travel card, the BofA Travel Rewards Secured is a smart pick.

U.S. Bank Cash+® Visa® Secured Card

The U.S. Bank Cash+ Secured Card stands out for its high cash-back potential and straightforward graduation to an unsecured card. With a $0 annual fee and a minimum $300 deposit, it works like a typical secured card, but the rewards program is exceptional: you get 5% cash back on two categories of your choice each quarter (up to $2,000 in combined spending), 2% back on one everyday category (like gas, groceries or restaurants), and 1% on everything else. This effectively mirrors the rewards of the unsecured U.S. Bank Cash+® Visa, allowing you to earn robust cash back while you build credit. U.S. Bank will regularly monitor your account and, over time, automatically graduate you to the unsecured Cash+ Visa Signature card when you qualify. Upon graduation, your security deposit is returned, and you keep the same account (your new card will have the same great 5% perks, but now without a deposit).

Because of the 5% categories, this card is particularly rewarding if your spending aligns with the bonus categories U.S. Bank offers (which you can choose and change each quarter). To speed up graduation, you’ll want to consistently pay on time and stay well under your credit limit – U.S. Bank tends to be a bit conservative, so demonstrating good habits for around a year or more is key. Affiliate-friendly nudge: For savvy spenders who want credit cards that grow with you, the Cash+ Secured is a fantastic tool. You not only enjoy customizable cash back while starting out, but you’re also working toward an unsecured version of the card that can continue to earn 5% in the long run. It’s a win-win for your wallet and your credit.

Tips for Speeding Up Graduation

Graduating to an unsecured card isn’t automatic for everyone – you need to prove to your issuer that you’re ready. Here are some expert tips to speed up your secured card graduation and boost your overall credit health:

• Pay early and often: Consider making payments before the statement closes (or multiple smaller payments throughout the month) to keep your balance low. This lowers your reported utilization and shows the bank you’re managing the card well. Keeping your monthly balance well under 30% of your credit limit is ideal, and under 10% is even better.
• Avoid missed payments: Never miss a due date. Payment history is the #1 factor in your credit score, and even a single 30-day late payment can tank your score by 100+ points. Set up automatic payments or reminders so you’re always on time, as a spotless payment record will impress your issuer and is often required for graduation.
• Keep utilization low: Use your card regularly but lightly. High credit utilization (using a large portion of your limit) can hurt your credit score and signal risk. Aim to use less than 30% of your available credit (e.g. keep a $200 limit card below about $60 balance) and pay off the balance in full each month. Low or zero carried debt month-to-month shows responsibility.
• Request graduation if not automatic: If your card doesn’t upgrade on its own after the promised period, don’t be shy about calling your issuer. Many banks will review your account upon request and may convert you to an unsecured card (especially if they now offer an unsecured version of your card). Demonstrate your improved credit score and payment history when you contact them.
• Monitor credit score improvements: Use free tools or your card’s app to track your credit score growth. As you practice good habits, you’ll see your score rise. A higher score (e.g. 650–700+) increases your odds of graduating and can also pre-qualify you for other better credit card offers. Plus, seeing your progress can motivate you to keep up those good habits until you hit the graduation point!

(Following these tips not only accelerates your secured card’s graduation, but also sets you up for long-term credit success. Good habits now will carry over to your unsecured card and any future loans or credit lines.)

What Happens After Graduation?

Congratulations – you’ve graduated! Once your secured card transitions to an unsecured card, here’s what to expect next:

• Security Deposit Refund: The first thing that happens is your security deposit is returned to you, usually as a credit on your account or a check/refund. That money is yours to use again. Since your card is now unsecured, the bank no longer needs collateral. It’s a great feeling to get that deposit back – it’s like a reward for your responsible credit use.
• Same Account, New Terms: In most cases, your account number and history stay the same, which is beneficial. You don’t lose the credit history you’ve built up. Whether the issuer simply removes the “secured” label or migrates you to a new product, you keep the good credit history you’ve earned with that card. In fact, some issuers will even send you a new physical card (often with different artwork and a new expiration date) but your account continues seamlessly. Your credit limit might also be increased at graduation (for example, some cards automatically bump you up to a higher limit once unsecured, reflecting the absence of the deposit constraint).
• New Benefits or Rewards: After graduation, you’ll enjoy the terms of an unsecured card. Often, this is the same card but unsecured, so it may have the same rewards structure but now with the potential for credit line growth. In some cases, issuers transition you to a different product altogether (for instance, a secured platinum might upgrade to a standard Platinum card with no rewards, or a secured student card might convert to a regular rewards card). Be sure to check if any new perks or changes apply. The good news: you’ll now be eligible for credit line increases without adding more deposits, and you might gain features like higher rewards, bonus offers, or lower APR over time.
• Impact on Credit: Graduating to unsecured is a positive milestone for your credit profile. Your card will continue to age and contribute to your credit length history. Plus, the increase in available credit (since your limit may go up and you have your deposit freed) can lower your overall credit utilization ratio, potentially giving your credit score another boost. From the credit bureau perspective, nothing negative happens – you don’t have a closed account (since you kept the same account open) and you’ve demonstrated growth. Going forward, you have the opportunity to further build credit with your new unsecured line.
• More Card Options: Finally, graduating opens doors. You can now apply for other unsecured credit cards more confidently, using your improved credit score and history. You might qualify for cards with better rewards, larger credit limits, or special features (travel cards, cash back cards, etc.). Essentially, you’ve leveled up in the credit world. That said, continue to use your card responsibly – graduation is not the end of your credit journey but the start of a new chapter. Keep up the habits (pay on time, avoid high balances) that got you here. Your graduated unsecured credit card can now serve as a foundation for even greater credit opportunities.

In summary, when your secured card graduates to unsecured, you’ve proven yourself. You get your deposit back, maintain your account (now deposit-free), and step into the world of “normal” credit cards with more confidence. Enjoy the benefits, but remain mindful of your spending just as you were before. This successful secured credit card graduation is a sign you’re on the right track – keep that momentum going!

Conclusion & Call-to-Action

Graduating from a secured card to an unsecured card is a significant achievement on your credit-building journey. It means you’ve shown responsible behavior and your issuer trusts you with an unsecured line of credit. Choosing a secured card that grows with you makes this process much smoother. The best secured credit card that graduates will not only help you build credit with good habits, but also reward you by evolving into a regular card without you ever needing to switch. This saves you time and preserves the length of your credit history. In short, picking the right card from the start can set you up for long-term success.

As you move forward with your new unsecured credit card (congrats again!), remember to keep practicing the smart habits you developed – they will continue to boost your credit score and unlock even better opportunities. If you’re still shopping for a secured card, we highly encourage you to explore our in-depth Best Secured Credit Cards guide for more options and detailed reviews. It’s packed with insights to help you compare cards and make the best choice for your needs. Also, check out our credit glossary for definitions of terms like Unsecured Credit Card, Credit Score, and Graduation in the context of credit cards – understanding these concepts will empower you to make savvy decisions.

Ready to take action? A secured card that graduates is more than just a temporary tool – it’s a partner in your credit journey. By selecting one of the recommended cards above, you’re setting yourself up for a brighter financial future. Apply with confidence, follow the tips to expedite your graduation, and soon you’ll be holding an unsecured card in your hand, deposit-free and proud of how far you’ve come. Good luck, and happy credit building!