What is the difference between a secured credit card and an unsecured credit card?

The main difference between a secured credit card and an unsecured credit card is the security deposit. A secured credit card requires a security deposit, which is a cash amount that is equal to the credit limit. This security deposit is held by the credit card company and can be used to cover any charges or late payments that the cardholder might incur. An unsecured credit card, however, does not require a security deposit. Instead, the cardholder is responsible for any charges or late payments they make without the security of a deposit. In Illinois, the laws governing secured and unsecured credit cards are the same. Unsecured credit cards typically have higher interest rates and fees than secured cards, but the laws that govern them are the same. The maximum penalty for late payment on a credit card in Illinois is the lesser of $25 or the total amount of the late payment. However, secured credit cards often have lower interest rates and fees, and may even come with perks such as rewards points or travel benefits. Ultimately, the difference between a secured credit card and an unsecured credit card comes down to the security deposit. With an unsecured credit card, the cardholder is not required to put down a security deposit, but they are responsible for any late payments or charges. With a secured credit card, the cardholder is required to deposit a certain amount of money which is equal to or greater than the credit limit. This money acts as a security for the credit company and can be used to cover any charges or late payments that the cardholder may incur.

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What is the difference between a secured credit card and an unsecured credit card?

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