At some point, most secured credit card accounts in good standing are converted into unsecured cards. But the specifics of when and how that change occurs varies quite a bit.

"It really depends on the credit product and the lending institution," says McGrigg. "There are some secured credit cards that actually convert to an unsecured account after a period of time, typically one year, if you have handled your account responsibly."

In other cases, creditors simply increase the cardholder's credit limit without requiring an additional deposit. But, says, McGrigg, that scenario doesn't mean that the account is necessarily switched to an unsecured account. Instead, it's possible that only a portion of the credit on the account is unsecured.

Another possibility is that the issuer will close the secured account and offer the cardholder the opportunity to open a new unsecured account.

When the account is switched to an unsecured card or the cardholder gets a new unsecured card that replaces the secured account, they are entitled to a refund of the deposit plus any interest earned. However, cardholders should be aware that the deposit is often applied to the first unsecured bill.