Unsecured credit cards are probably what you think of when you imagine a credit card.

These are any credit cards that don’t require you to put up any type of collateral, such as a deposit, to get approved. Unlike secured credit cards, unsecured cards aren’t connected to a cash security deposit. Instead, your credit limit is determined by the issuer upon opening.

Unsecured cards may be any range of card types, from travel rewards cards to cash back cards and balance transfer cards.

Here’s a closer look at how an unsecured credit card works, some pros and cons and how you can qualify for one.

What is an unsecured credit card?

Most credit cards on the market are unsecured credit cards.

When you apply and are approved for an unsecured credit card, you’ll be extended a line of credit that you can draw on and then pay off (or make payments toward) each month. The card issuer uses your application and credit score to determine your eligibility and credit limit. Factors like previous payment history and income can indicate to the issuer whether you’ll be able to make appropriate payments on any balances you have on your card.

Because unsecured credit cards aren’t backed by any kind of deposit like secured cards are, they’re more of a risk for the issuer. That’s why issuers consider a number of factors to determine the likelihood you’ll be able to pay off the charges you put on your card before they approve your application.

Pros and cons of unsecured credit cards

Using an unsecured credit card can have many advantages. The biggest advantage of applying for an unsecured card over a secured card is that you simply have more options to choose from. Unsecured credit cards can range from student cards to travel rewards cards to cash back cards and more.

It is a pretty sure bet that you will be able to find an unsecured credit card to help you achieve your spending goals.

Here are a few more benefits:

Pros of an unsecured credit card

  • Does not require a deposit for collateral. Your credit limit is based on creditworthiness, so you don’t have to put any deposit down upon opening.
  • Better rewards and benefits. While it depends on the card, unsecured credit cards typically have more lucrative rewards. Many unsecured credit cards offer some very nice introductory offers to attract applicants, like bonus miles, points and cash back or the option of a 0 percent intro APR period, meaning you can make interest-free purchases during an introductory period before the regular APR kicks in.
  • Few (or avoidable) fees.Another advantage of an unsecured credit card is that you will likely have fewer fees to deal with. There are a variety of unsecured credit cards that have no annual fee, and many also have no foreign transaction fees.

While unsecured credit cards have a lot to offer, there are a few drawbacks that can make secured cards better for some users.

Cons of an unsecured credit card

  • Harder to get approval. Unsecured credit cards require a good credit score and credit history. If you don’t have good credit or any credit history at all, you may have a difficult time qualifying for one.
  • Easier to spend beyond your means. While unsecured credit cards are riskier for lenders because they are not secured by collateral, they also hold risk for the cardholder — more spending power. Your credit limit can be thousands of dollars. When you use your card to make a purchase, it is important to have the means to pay your bill in full at the end of the month. Otherwise, interest will begin to add up and you may find yourself in a sticky situation.

Who is an unsecured card best for?

If you have bad credit or no credit history at all, you may have a hard time getting approved for an unsecured credit card. Secured cards can be great for building or repairing credit with little risk, as long as you have the money upfront for a security deposit.

When it comes to unsecured cards, there are dozens of options on the market with various benefits and fees to suit any type of spender. Before applying for one, make sure you choose a card that will best suit your regular spending and financial goals.

Here are a few examples of different types of consumers who may (or should) consider unsecured credit cards:

  • The budgeter: If you are already conscious about the money you spend each month (and your good financial habits have led to a strong credit history) an unsecured credit card can help you maximize your everyday purchases with cash back. Footing the bill for a massive family grocery haul you embark on once or twice a month doesn’t have to be an errand you dread. You have the opportunity to earn a fixed percentage on eligible purchases or opt for tiered categories tailored to areas you find yourself spending a lot on each month such as groceries, dining or even gas.
  • The frequent flyer: A travel rewards credit card is a great way for frequent travelers (whether for business trips or personal vacations) to earn miles and points to help offset the cost. Many travel cards come with a hefty price tag annually, but those fees can be offset by generous sign-up bonuses and luxury perks such as airport lounge access. The typical baseline credit score requirement for a travel card is good to excellent (670-850), which could make it difficult to qualify if you fall below 670.
  • The business owner: Business credit cards are designed to help companies and entrepreneurs benefit from everyday spending. You do not have to own a storefront to qualify; freelancers can take advantage of generous rewards programs and expense tracking, too. Business credit cards may offer great rewards rates, no foreign transaction fees, no annual fees and significant sign-up bonuses. These rewards and benefits vary from card to card, but much like travel rewards cards, business credit cards typically require a credit score in the good to excellent (670-850) range to qualify.

What credit score do you need to qualify for an unsecured card?

A big differentiating factor between secured and unsecured credit cards is the credit score you’ll need for approval.

Because unsecured card issuers use your credit score to help determine if you are capable of handling credit and payments responsibly, the stronger your credit score, the more options you will have.

Most unsecured credit cards require credit in the good to excellent range (670-850). This range is where you’ll become eligible for many different kinds of rewards and 0 percent intro APR cards. You can also find some cards that will accept a score in the fair to good range (580-669). Once your score dips below 580, your options become much more limited. While you can still find unsecured cards, you will likely have to pay more fees and won’t get as many rewards options.

Alternatives to unsecured credit cards

If your credit score is on the lower end of the scoring range, you’ll have a higher chance of getting approved for a secured credit card. These cards do require an upfront deposit, which will act as your credit limit. You can use your secured card to build credit until your score improves. Using a secured credit card for small purchases and paying your balance in full each month is a great way to establish a reliable payment history and increase your credit score.

There are alternative ways to get access to an unsecured credit card, though. For one, you can become an authorized user on someone else’s account. Authorized users don’t have to meet the same credit score qualifications as primary cardholders because they aren’t responsible for making payments on the credit card account. Despite not having any legal responsibility for paying on the credit card they are authorized to use, authorized users can reap the benefits of card activity on their credit scores. You just have to make sure that the card issuer includes authorized users in their reporting. So, as an authorized user, you can have access to a credit card and build up your credit score at the same time. If you choose this route, it’s important to pick a primary cardholder you trust, who practices good credit habits.

The bottom line

Unsecured credit cards provide some of the best rewards and benefits among card options available today. You can use an unsecured card to pay down existing debt, rack up miles toward a future vacation or save a bit of cash on increasingly costly trips to the grocery store.

However, they also require good credit to qualify. If you are new to the credit card game and you don’t can’t get an unsecured card yet, it is not the end of the world. A secured credit card can help you build your credit score while building strong credit habits that can help you graduate to an unsecured card and maintain a great score long-term.