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Credit cards are generally not secured debt. The majority of credit cards fall under the unsecured debt category which refers to debt that does not have any collateral or lien against an asset. The most common type of unsecured debt are credit cards, personal loans, lines of credit, payday loans and student loans.
A secured credit card is a credit card that is backed by a cash deposit, which serves as collateral should the cardholder default on payments. The deposit aside, secured credit cards function like any credit card.
Student loans, personal loans and credit cards are all example of unsecured loans. Since there's no collateral, financial institutions give out unsecured loans based in large part on your credit score and history of repaying past debts.
However, most lenders will not let you repay your mortgage using your credit card, which would effectively mean replacing one debt with another. Even if you are allowed to repay your mortgage through a credit card, there are still several reasons you may want to reconsider.
Here are steps for using a secured credit card in responsible ways. Make small purchases you can pay off each month. ... Pay on time, and more than the minimum. ... Set payment alerts for your secured credit card. ... Enroll your secured credit card in auto-pay.