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How to graduate to an unsecured credit card

Tips to help you transition to an approved credit line

Read, 3 minutes

If you’re new to using credit—or your credit has taken a hit—it can be difficult to buy a home, lease a car or qualify for better interest rates. One common option to establish, strengthen or rebuild your credit is to open a secured credit card. Secured credit cards function much like traditional ones, but they require a cash deposit upfront to guarantee your credit line.

Using a secured credit card wisely can establish or improve your credit score over time. It can take anywhere from a few months to years of responsible use for your credit score to change.

To help you get there, here are 10 do’s and don’ts for using a secured credit card.

Do's
Don'ts

4 signs you’re ready to graduate to an unsecured credit card

You prove over time that you use credit responsibly.

Your credit score improves consistently for several months in a row.

Your limits are raised on your secured card by your financial institution without requiring additional deposits.

You’re notified by your secured card issuer that you qualify to graduate.

Quick tip

When you graduate to an unsecured card, you will get back your security deposit. It’s a good idea to put that money toward savings or your rainy-day fund.

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The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

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