How to Graduate from a Secured to an Unsecured Card

Graduating from a secured credit card to an unsecured card is a major milestone in your credit-building journey. It means you've demonstrated responsible credit use and no longer need to keep a deposit locked up. In this guide, we'll explain exactly how graduation works and what you can do to make it happen faster.

What Does "Graduation" Mean?

Graduation is when your secured credit card converts to an unsecured credit card. When this happens:

• Your security deposit is refunded – You get your money back
• Your credit limit may increase – No longer tied to your deposit
• Your account history is preserved – The age of the account stays the same
• The card continues working – Same card number, same account

This is the ideal outcome because you keep your credit history intact while getting your deposit back.

Which Cards Offer Graduation?

Not all secured cards offer graduation. Here's a breakdown from our secured card comparison:

How the Graduation Process Works

Automatic Review Process

Most issuers that offer graduation conduct automatic reviews at regular intervals. You don't need to request a review—the issuer monitors your account and evaluates whether you qualify.

What Issuers Look For

• Payment history: Consistent on-time payments (most important)
• Account age: Usually 6-18 months minimum
• Credit utilization: Responsible usage patterns
• Overall creditworthiness: Your credit score improvement
• Account standing: No late fees, overlimit fees, or issues

When You're Approved

If approved for graduation, you'll typically receive notification by mail or email. Your deposit will be refunded within 1-2 billing cycles, usually as a statement credit or check. Your account remains open with the same account number.

How to Maximize Your Chances

1. Pay On Time Every Month

This is non-negotiable. A single late payment can disqualify you from graduation and severely damage your credit score. Set up autopay to ensure you never miss a due date.

2. Keep Utilization Low

Aim to keep your credit utilization below 30%—ideally under 10%. This demonstrates responsible credit management and shows you're not dependent on your credit limit.

3. Use Your Card Regularly

Don't let your card sit idle. Regular activity shows the issuer that you're actively using and managing your credit responsibly.

4. Monitor Your Credit Score

Track your credit score improvement over time. Significant improvement strengthens your case for graduation.

5. Be Patient

Graduation typically takes 6-18 months depending on the issuer. Don't expect it in the first few months—focus on building good habits.

What If Your Card Doesn't Graduate?

If you have a card like OpenSky® or Merrick Bank that doesn't offer graduation, you have several options:

Option 1: Apply for Unsecured Cards Elsewhere

After 6-12 months of responsible secured card use, your credit score should improve enough to qualify for entry-level unsecured cards from other issuers. Store cards and starter cards from Capital One or Discover are good options.

Option 2: Keep Using the Secured Card

Continue using your secured card to build credit history. The longer your accounts are open, the better for your credit score. If the card has no annual fee, there's no cost to keeping it open.

Option 3: Close and Apply Elsewhere

If your secured card has an annual fee and doesn't graduate, you might choose to close it and apply for a better card. However, closing a credit card can temporarily hurt your credit score, so weigh the pros and cons.

Alternative: Product Change

Some issuers offer a "product change" instead of or in addition to graduation. This means switching to a different card from the same issuer. For example, if you have a basic secured card, you might be able to switch to a rewards card.

Benefits of Product Change

• Preserves your credit history length
• No hard inquiry on your credit report
• May get better rewards or benefits
• Can be done even if automatic graduation isn't offered

How to Request

Call your card issuer's customer service line and ask about product change options. Not all issuers offer this, but it's worth asking, especially after 12+ months of responsible use.

After Graduation: What's Next?

Once you've graduated to an unsecured card, you're on your way to building excellent credit. Here's what to do next:

1. Continue good habits: The same rules apply—pay on time, keep utilization low
2. Consider applying for more cards: Your improved credit opens more options
3. Look for rewards cards: You may now qualify for cards with cash back or travel points
4. Think about credit limit increases: Higher limits improve your utilization ratio
5. Monitor your progress: Keep tracking your credit score

Common Questions About Graduation

Will graduation hurt my credit score?

No. Graduation preserves your account and credit history. It's actually neutral to positive for your score since you maintain your credit history length.

Can I request early graduation?

You can call and ask, but most issuers have set review timelines. Demonstrating responsible use is the best way to graduate as early as possible.

What if I'm denied graduation?

Continue using your card responsibly. You'll likely be reviewed again in a few months. Focus on maintaining perfect payment history and low utilization.

How do I get my deposit back?

After graduation, your deposit is automatically refunded, typically as a statement credit or check within 1-2 billing cycles.

Final Thoughts

Graduating from a secured to an unsecured credit card is an achievable goal for anyone who uses their card responsibly. Focus on paying on time, keeping utilization low, and being patient. Within 6-18 months, you'll likely qualify for graduation—and get your deposit back.

If you're just starting out, choose a secured card with a clear graduation path. Visit our secured credit card comparison to see which cards offer automatic graduation reviews. At CreditSecuredZone, we help you make informed decisions for your credit-building journey.