News & Resources

Unsecured or Secured Credit Cards: What's the Difference?

May 9, 2019
3 mins
A pile of three credit cards

Are you looking for secured credit cards? Not sure if you should open a secured or unsecured card? If you're rebuilding your credit score, a secured credit card can help you get your credit back on track.

An unsecured credit card requires you to have established credit and can often include travel rewards and cash back rewards. Use these helpful tips to find the right credit card for your particular needs.

Secured credit cards

Secured credit cards are credit cards that require a deposit. When you receive the card, you link it to your bank account and pre-load it with money. You can then use the card.

Benefits of secured credit cards

A secured credit card is great for people with little to no credit. Secured credit card benefits include:

  • It will help you get used to paying a regular monthly payment.
  • As you pay on time each month, you can eventually transfer to an unsecured card.
  • The credit card issuer might increase your credit limit as you make consistent payments after a year.

The best secured credit cards

Looking for secured credit cards? Canadian residents can take advantage of these great offers:

  • No Fee Home Trust Secured Visa Card: No annual fee, 19.99% interest, build your credit over time.
  • Refresh Secured Visa:$12.95 annual fee, 17.99% interest rate, no credit score required.
  • Home Trust Secured Visa:$59 annual fee, 14.90% interest rate, $500 minimum deposit.

Unsecured credit cards

With unsecured credit cards, these don’t require a security deposit. Unsecured cards are for people with fair, good or excellent credit. People with poor credit can still apply but their interest rates will be much higher.

Benefits of unsecured credit cards

Looking for the best rewards credit card? While the rewards can vary from one lender to the next, an unsecured credit card can include a host of benefits that help with shopping and travel. Unsecured credit cards include benefits like:

  • Cashback rewards.
  • Travel reward points.
  • Lower interest rates.
  • No or a low annual fee.
  • Mileage points.

The best unsecured credit cards

Looking for unsecured credit cards? Check out these great credit card offers:

  • President’s Choice Financial World Elite Mastercard: No annual fee, 19.97% APR, three percent rewards, balance transfer. Get 45 PC Optimum points for each dollar spent at Shoppers Drug Mart.
  • Aventura Travellers Travel Visa Card: Earn $750 in travel and get 20,000 Aventura points. Other features include a $120 travel reward credit, access to the airport lounge and other perks.
  • Scotiabank Passport Visa Infinite Card: Earn 40,000 Scotia bonus reward points for up to $400 in travel money.

Ready to open a new credit card?

If your credit isn’t good or you have no credit, start with a secured credit card to build up your credit card history.

When you build your credit history with consistent monthly payments, switch over to an unsecured credit card. Your unsecured credit card can include cash back and travel rewards.

RATESDOTCA Team

The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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