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News: Best Way To Close A Secured Credit Card -

Secured credit cards help us start building our credit or repair damaged credit. But eventually, you will want to move on and get an unsecured credit card that does not require a security deposit.

When you apply for a secured credit card, you put down a security deposit upfront that is equal to your credit limit. Secured credit cards report your activity to the credit bureaus and, if managed responsibly, you build credit or improve your credit score over time. When the time comes (typically in one year), your credit score is high enough to get a traditional credit card that can earn you rewards or offers a lower interest rate.

There are two basic ways to move on: you can either upgrade your secured card to an unsecured one or simply apply for a completely new unsecured credit card.

Upgrading your secured card to an unsecured account is the easiest option and won't require any additional application (the issuer may run a credit check though). To upgrade your card, you should, first of all, find out if the issuer allows it. You will need to contact the issuer of your secured credit card and discuss your options. Upgrading a secured credit card has a small impact on your credit score.

Closing a secured credit card and applying for a new unsecured credit card is the best option when the issuer of your secured card doesn't offer an upgrade option. Since you paid a deposit to get a secured credit card, it's not worth holding onto it. Ones your credit scores get an increase, start researching new cards. When you apply and get approved for a new card, you can cancel your secured credit card. To do that, you should simply call the number on the back of your secured card to speak to a representative and let them know that you would like to permanently close your card. This option will have a greater impact on your credit score.