How Long Should I Keep Using a Secured Credit Card?

Trisha Miller  | 

You’ve started making some improvements to your spending habits. You’ve been using your secured credit card for a while, but you want to know when you can move on to larger investments, or a traditional credit card with better rewards. Although some services, like credit repair, can drastically improve your credit score in a short amount of time, building a solid foundation of good spending habits takes a lot of time no matter who you are. Those who are dedicated to a solid credit score repeat these good habits over a lifetime. You’ll need to be disciplined about investing that time into improving your credit score and keeping it that way. Credit histories and scores are updated frequently with new information, but one piece of good information does not change your entire score on its own. Let’s take a look at when you’ll start to see improvements and when it might be time to move on from a secured credit card.

When Will I Start to See Improvement on My Credit Score?

Credit cards (in general) are a good thing to own for your credit’s sake. Using them, if even just for a small purchase you then pay off quickly, adds positive information to your credit history, which will help keep your credit score in line with your dream number. Of course, many other things will also improve your credit score such as paying off other loans (like auto loans, home loans, and student loans). Keeping your credit utilization ratio low is always a good thing to keep in mind as well. This means, not maxing out your credit cards, personal loans, and any other loans available to you. The more you pay off, the better your situation will be.

Depending on the status of your credit score, you may be able to see improvements in your score in just a few short months. However, I’d say that most individuals will at least see a small improvement in about six months — if they are being consistent about paying off debts and get their other spending and borrowing habits in line. Although, if your goal is to drastically improve your credit score and improve your long-term financial habits, I think it is very much worth it to stick with a credit repair plan for much longer than that. If you’re looking to see the largest improvement to your credit score over a short period of time, then I would suggest looking into other methods of credit repair, like the ones we mentioned above, in addition to using a secured credit card. Simply using a secured credit card to do all of the heavy lifting will take longer than a combination of credit repair tactics.

With that being said, secured credit cards are good for most of us with no or limited history, and anywhere from very poor to average credit. It’s not that a secured credit card would be “bad” for anyone with a higher credit score than average, it’s just that someone with good or excellent credit will probably be able to get their hands on a higher limit, standard credit card (likely with better rewards). The goal with a secured credit card should be to get your credit into your preferred range (most of us dream of being in that excellent bracket). Once you’re in your desired range, you shouldn’t have to use a secured credit card anymore.

How Long Should I Plan to Use a Secured Credit Card?

If you have bad credit, no credit, or little credit history and you want to know how long you should use it, I’d say until you have average to good credit. Once you feel like you have a handle on your finances, you’ve got some good information being added to your credit on the regular, and your loan totals have been lowered a bit, it could be time to upgrade to a higher limit, no deposit required credit card. Yet, I do not suggest doing so until you’re completely comfortable with where you’re at right now. If you feel that adding a credit card with a $2000 limit is going to be too tempting to max out, then you should stick with the secured credit card. Your goal is to keep the balance low and use it only when you need it. You should feel confident that you can pay off anything that you charge.

Using a secured credit card for years is okay. Having a secured credit card isn’t a bad thing on its own, but it can provide diminishing returns as far as building positive credit over time. For some of us, this low limit and low risk is just more realistic for our spending habits and that’s okay. However, if you’re simply trying to do the crash course in rebooting your finances and you want to see results quickly, work on using a secured credit card in conjunction with paying off the rest of your debts. Once you have that in a manageable range, upgrade that card to a regular credit card with a higher limit and keep the balance low. The higher your limit and the lower your balance, the better it is for your credit score.

As such, having a higher limit credit card with a low balance is technically better than having a low limit secured credit card. If you can manage having more than one credit card, that’s even better. The credit bureaus will see that you’re making your payments on time and your balance is low, even though the bank offered you so much — that’s a great thing for your credit score. People should typically be able to achieve this feat in a couple of years or less. However, as I mentioned, keeping it for longer is just fine.

In the end, some individuals might use a secured credit card simply as a stepping stone towards a more standard card. For many, it could only take six months or so to see the type of improvement they want in order to become improved for a new loan or line of credit. Others might have to do a bit of damage control and it might benefit you to keep the card open for a year or two while you pay off your other loans. Lastly, some people know that their spending habits are best handled by keeping a secured credit card long term instead of a higher limit one, so they might never close it. All of these situations are totally normal and okay. Do whatever is right for your financial situation, your spending habits, and your credit score goals.  


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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.

This post was updated August 24, 2017. It was originally published August 31, 2017.