Applicants

• Virtually everyone who applies for a secured credit card is accepted, regardless of their credit history, as long as they have money to secure the card. Applicants for unsecured credit cards are screened based on their credit history and income. Because the debt will not be secured by a bank account, card issuers must feel confident that it will be repaid. They choose the most financially sound applicants to lower the risk of default on unsecured cards.
  
  

Annual Fee

• Virtually all secured credit card issuers charge an annual fee. Some unsecured card issuers charge one, but most offer free cards in order to remain competitive. Among unsecured cards, annual fees are most commonly charged on accounts that provide airline miles or other rewards. Prestige cards may also charge a fee. However, it will sometimes be waived upon request.
  
  

Interest Rate

• Secured credit cards tend to have much higher interest rates when compared to unsecured cards. This rate can run up to 20 percent. Secured card companies can demand higher interest because their customers have limited choices. They don't qualify for unsecured cards because of their credit history, so they must pay whatever a secured company charges. Unsecured credit cards charge competitive rates because many of their customers can shop around. However, they usually boost the rate for customers who make a late payment or go over their credit limit.
  
  

Rewards

• Secured credit card holders don't typically earn rewards for using the account. Many unsecured credit cards offer airline miles, points toward hotel stays, cash back or other rewards.
  
  

Credit Limit

• Secured credit cards have low credit limits because the limit is based on the amount deposited by the cardholder. Most secured card customers cannot afford to make a large deposit. The limit may be as low as $300 to $500 because that is the minimum deposit amount required by most issuers. Unsecured credit cards may have limits of up to $10,000 or more. Their issuers base the limit on a person's credit rating and card use history. They will raise it periodically on their own, and customers can request an increase.