Understanding Unsecured Credit Cards
When you're working to build or rebuild your credit, you may have heard about different types of credit cards, like secured and unsecured. Understanding the difference between them is the first step toward a stronger financial future.
What Is an Unsecured Credit Card?
An unsecured credit card is the type of credit card you're probably most familiar with. The card issuer looks at things like your income and credit history to decide if you're approved and what your credit limit will be.
Traditional unsecured cards typically require a higher credit score for approval.* This may make it difficult for many people with a limited credit history or low credit score to get one.
How Is an Unsecured Card Different from a Secured Card?
When used responsibly, both options can help with building credit. The main difference between a secured and unsecured credit card is the security deposit.
Secured Credit Cards: These cards require a cash deposit upfront, which typically acts as your credit limit. Secured cards can be a good starting point for building credit, as they are typically easier to get approved for if you have a low or no credit score. However, they require that you have cash on hand, so this may not be an option for everyone.
Unsecured Credit Cards: These cards offer you a line of credit without you having to match the credit limit with cash up front. You are approved for a credit limit, and as you make purchases, your available credit goes down. When you pay off your balance, your credit limit is restored.
The Challenge for People with Credit Hurdles
Many people with steady jobs and consistent income can have their options restricted by their credit score. They are seeking to improve their credit to access better financial products in the future, but need an opportunity to do so.
An Unsecured Credit Card Designed for You
At Perpay, we believe your paycheck should work harder for you. That's why we created a different kind of financial tool that helps you access what you need today while building credit for tomorrow.⁴
The Perpay Credit Card¹ is an unsecured card powered by your paycheck. You can access the Card when you set up a recurring direct deposit payment from your paycheck. Unlike many secured credit cards, you don’t need to pay the amount of your credit line upfront. You can use the Card as soon as you receive it, and keep your cash on hand for when you need it.
Here’s how it works:
Access up to a $1,500 starting credit limit: The Perpay Credit Card is an unsecured card with no security deposit or annual fee.² Apply risk-free, with no impact to your credit score to apply.³
Stress-free, automatic transfers: You can set up payments to come directly from your paycheck via direct deposit each time you’re paid. From there, you can turn on automatic transfers⁵, which will apply that money to your Card if you have a balance. This makes consistent, on-time payments stress-free, a key factor in building credit.⁴ Automatic transfers are entirely voluntary.
Earn rewards with every payment: Every successful payment earns 2% rewards toward the Perpay Marketplace.⁶
The Perpay Credit Card is a solution that can help you take steps towards achieving your financial goals, giving you a path to access the trust you deserve from financial services.
Frequently Asked Questions (FAQs)
Q: Do I need a good credit score to get an unsecured credit card? A: There are options for people with lower credit scores, though they may come with upfront annual fees and fewer perks.* The Perpay Credit Card is an unsecured option designed to help those with lower credit scores gain access to the credit they deserve. The Perpay Credit Card offers a monthly fee, rather than an annual fee so that you can keep your cash on hand.
Q: Are unsecured cards better than secured cards? A: It depends on your situation. Secured cards can be a great starting point. However, unsecured cards, like the Perpay Credit Card, don’t require you to tie up your money and can offer a path to a higher credit limit.
Q: Does using an unsecured card help my credit score? A: Using any credit card responsibly can help build your credit. Making on-time payments and keeping your credit utilization low are the most important factors for improving your credit score.
Sources:
1The Perpay Credit Card is subject to credit approval. Not available to residents of New Hampshire. The Perpay Credit Card is issued by Celtic Bank. The Perpay Credit Card is an unsecured credit card with eligibility requirements such as ongoing payroll direct deposits. See our Direct Deposit Terms and Cardholder Agreement for more information.
2 Monthly card servicing fee ranges from $5.50 to $9.00. APR: The APR will vary with the market based on the Prime Rate and can be found in the Cardholder Agreement.
3 Applying for a Perpay Credit Card will not affect your FICO® or Vantage® scores. However, we may obtain information from Clarity which may affect your credit profile with this alternative credit bureau.
4 On-time payment history can have a positive impact on your credit score. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make on time payments by the payment due date may result in delinquent payment reporting to credit bureaus which may negatively impact your credit score. This product will not remove negative credit history from your credit report. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors. Perpay will report your transactions to Experian®, Equifax®, and TransUnion®. Credit score improvement is not guaranteed.
5 With automatic transfers enabled.
6 Earn rewards each time you make a payment towards your balance on the Perpay Credit Card. All rewards are earned in the form of Perpay Marketplace credits. See our Perpay Credit Card Rewards Program Terms for more details.