What does Unsecured credit card or an unsecured loan mean?

Good Morning Sherri! Visit www.CreditKarma.com for a free credit profile account using the TransUnion credit model. There is a lot of educational material there via tips as well as questions and answer posts. A Secured Credit Card is one where you would put money into an account as the "Collateral" and then borrow against it. Secured means that there is something of value being borrowed against. For example, a Car Loan is Secured by the Car itself as is the case with a Mortgage where the Real Estate (house and land) is the Collateral. Unsecured would have nothing attached and is based purely on your credit profile. Have a great day!

One is backs by collateral

An unsecured loan or credit card has no collateral (thing of value) that the lender can take, if you fail to make the agreed upon payments.

Sherri -- best example of an unsecured credit card is one where you do not put any money into the bank, before using it, and when you buy something with the credit card - such as a dinner out - you have an unsecured loan.

A secured credit card is when for example you put down $300 dollars and the bank gives you a credit card with a $300 dollar limit. A unsecured credit card just means that you qualified for a $300 credit card and you didn't have to put anything down. So if you qualify for unsecured debt you typically have excellent or good credit. If you have any questions just email me or call and I would be happy to explain this for you in further detail.