Start My Answer

What is Unsecured Credit Card Debt?

Dena Standley | December 06, 2022

Credit card debt isn't always a bad thing.

Summary: Unsecured credit card debt is a debt that isn’t backed by assets or collateral, and it is a very common type of debt among American consumers. They are attractive because you do not need collateral for the debt, and approvals can happen quickly. On the flip side, unsecured credit cards have risks. For example, creditors usually resort to credit reporting, lawsuits, and selling accounts to make you pay.

Credit cards are credit facilities by banks that usually have a preset limit. When consumers talk of credit cards, they almost always refer to unsecured cards. They are the most common credit cards because of quick approvals without requiring collateral.

In 2019, Experian estimated that the average American consumer had four credit cards. And as the cost of living keeps increasing, more people are relying on this type of debt for upkeep.

Unsecured credit cards have their upside and downside. Before opening a new credit card account, you should understand these factors. First, we will examine why consumers prefer unsecured credit cards.

Why do consumers prefer unsecured credit card debt?

You do not need to pay an initial deposit to secure debt. You also do not need to risk your car or house if you default. Let us look at these and additional reasons you may favor unsecured debt.

No collateral necessary with unsecured debt

There is no risk that the creditor may take your property if you fail to pay the debt. Consumers find this aspect appealing.

Unsecured credit card debt does not affect your bank account.

You can use your credit card, knowing it will not interfere with your debit accounts. This offers peace of mind in knowing you will not face overdraft fees or declined transactions if you do not have enough money in the account to cover the expenditure.

Unsecured debt gives you fast credit access

Unsecured credit cards can take minutes to approve. And the physical card does not take too long to reach you either. You can use your new card within days of application.

Consumers in emergencies like to get money fast. You can pay for an urgent flight that you would not afford otherwise. Even creditors with limited credit history can access unsecured starter credit cards.

Unsecured credit card debt can improve your credit score

Credit cards can significantly raise your credit score if you keep up with debt payments and you do not keep your cards at or near their limits. Available credit is another important factor in your overall credit score.

Cashless transactions

With a credit card, you can “carry” cash around without carrying it. Cashless shopping saves you the hassle of tracking purchases and balances and handling hard currency, which is not always sanitary.

You can liquidate credit cards for cash

Although they can be expensive, cash advances on your credit card can be a life preserver during an emergency, but cash advances come with a significant price as interest rates are usually higher on cash advances.

However, unsecured credit card debt is not all rosy.

Unsecured credit card debt has a downside

If you plan to open a credit card account, you should be wary of these setbacks.

Credit card debt has high-interest rates

It is a no-brainer that banks charge high-interest rates on unsecured debts. After all, they risk significant losses if you default.

Some consumers also use bankruptcy to evade payment.

Unsecured loans require a high credit score

Credit providers need to know that you are a responsible borrower. Many unsecured loans usually come with a high credit score requirement. As a result, consumers (like those who filed for bankruptcy in the past) may be unable to afford them.

Unsecured credit card debt can ruin your credit

Defaulted unsecured debts get to your file quickly. Creditors know they have no collateral, so they use your fear of a damaged credit score to compel you to pay.

Related: Get credit card debt relief.

Unsecured credit card debt and debt collection

Unsecured debt does not give creditors a fallback collateral, as we have mentioned. So they may turn to third-party debt collectors or sell the debt to collection agencies to try and recover some of their money.

Debt collectors are aggressive and persistent. Their calls and collection letters are a consumer's nightmare.

You may want to steer clear of unsecured credit card debt if you suspect that you might default. However, if you are already in debt and debt collectors are coming after you, SoloSuit can help.

Example: Joan was attracted to unsecured credit cards because of the ease of approval. Soon, she applied for one card after the other and ended up with seven cards. Before Joan knew it, she was falling behind on multiple accounts. And then her worst fears materialized — collection calls and letters started coming. Fortunately for her, she had heard about SoloSuit from a friend. She could respond quickly, offer to settle, and rebuild her credit.


Respond to debt collection calls.

Can a creditor sue me for unsecured credit card debt?

Yes. After collection agencies, the courts are creditors' best bet to make you pay an unsecured debt.

The law limits how much time a creditor has to sue you depending on the type of debt. This period is called the statute of limitations. It will help if you stay current on your state's current laws.

If a creditor sues you for unsecured credit card debt, you should respond to the court Summons before your state’s deadline.

Follow these steps to respond to the Summons. [Or use SoloSuit to create and file the Answer.]

  • Step 1: Read carefully and respond to every claim in the Complaint. You can choose one of three options — deny, deny for lack of knowledge, or agree.

  • Step 2: Assert all your affirmative defenses. Here is where you use the law to defend yourself. For example, state if the creditor asks for more than you owe.

  • Step 3: File your Answer at the court, send a copy to the debt collector, and keep one for yourself.

Suppose the debt is legally yours, but you cannot afford to pay. Then you can use SoloSettle to send the creditor a settlement offer. You may settle for a lot less than the debt collector is asking.

Nearly 200 million Americans have at least one credit card this year (2022). The average in 2021 was four cards per consumer, according to Experian. Most are unsecured, meaning the creditor cannot take your property if you default.

Unsecured loan providers charge high-interest rates to cover the high risk of default. They are also more likely to hire third-party debt collectors or sell your account. Unsecured debt creditors may also sue you to recoup their money.

Use SoloSuit to fight your debt battles. It saves you the often astronomical costs of hiring an attorney and gives you access to the tools you need.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.



Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.


We have answers

Join our community of over 40,000 people.


You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.


Get Started

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court

Not sued yet?

Use our Debt Validation Letter.


Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.


Let's Do It

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started