When anyone mentions the term “credit card,” usually, the unsecured credit card is what they are talking about. This means that a bank or lender offers you credit based on your history and their belief that you are reliable. However, they have nothing to fall back on if you fail to do so. There is, of course, the opposite type of “secured” credit card. Simply put, this type of card is financially secured by funds deposited into a savings, checking, money market account or certificate of deposit. Unsecured credit cards are very common, and often misused. Read this guide before you decide if you want this type of card or who you want to get it from.
Unsecured Credit Cards And Unsecured Charge Cards
Some consumers confuse unsecured credit cards with unsecured charge cards. There is a distinct difference between the two. Where credit cards allow the card user to carry over a balance from month to month, charge cards generally require the cardholder to pay off the balance in full at the end of the monthly billing cycle. Also, if you decide to carry a balance on a credit card, you are charged an interest rate. Any balances not paid on an unsecured charge card will incur a sometimes hefty fee, and can sometimes result in the cancellation of your charge card.
Types Of Unsecured Credit Cards
The name unsecured credit card can refer to a number of credit card types. These various card types all have the lack of security required, but in many cases, a credit card consumer might have to sort through dozens (possibly hundreds) of options, features, and card subsets in order to find the best card for them. For example, unsecured credit cards are offered by a few major card brands: American Express, Citibank, Discover, MasterCard, and Visa. Each of these credit merchants can partner with any number of hundreds of banks and financial institutions, airlines, hotels and resorts, major retailers, universities, gas stations, or catalog retailers. Each of these partnerships could develop multiple unsecured credit card products; resulting in literally thousands of possible credit card choices for the interested consumer.
If you are cautious when selecting the best type of unsecured credit card for you, you will take time to evaluate just what you need and want when it comes to a credit product. Understanding your credit needs will make the difference between getting the most from your credit card or your credit card getting the most from your wallet.
Planning Ahead For An Unsecured Credit Card
Before you select a card to apply for, you will need to know how you are going to use it. First, you will need to know if you will be carrying a balance from month to month; if so, you will want to select a card that has a very low annual percentage rate (APR). Selecting a card with a high interest rate can end up costing you a great deal of money if you regularly carry credit balances over from one billing cycle to another regardless of any other features or promotional offers the card might provide you.
Unsecured Credit Card Programs
If you are at a particular life stage, that is, student, business person, retired, etc.; you might want to select a card that carries specific programs and features targeted to fit the needs of your consumer group. Analyze your lifestyle as well. If you are a consummate shopper, a frequent flier, regular leisure traveler, or even a do-it-yourself weekend warrior. You will find more than a few unsecured reward credit cards targeted to these groups to select from.
Rebuilding Your Credit With An Unsecured Credit Card
There are also unsecured credit cards specifically designed to help rebuild your credit. These cards will often come with restrictions, but if your credit usage and repayment behavior over a predetermined time period receives a positive review, you will often be “graduated” into a more standard credit card product.
Things To Keep In Mind
A few notes of caution. While unsecured credit cards are a standard product and widely accepted, it is important that you only do business with reputable credit brands and financial institutions that maintain strength and good reputations. There are many scams dealing with pre-approved credit and unsecured credit cards through offshore financial institutions. While reputable financial organizations do provide good credit products, most do not solicit.
Also, any offshore institution that requires a membership fee (sometimes ranging from $50 to several hundred dollars) is most definitely suspicious. Finally, be certain the companies that back and/or brand your credit cards can be researched and verified. There are scams that will have you submit applications just to get your personal information. This is one of the many ways crooks try to steal identities and it can cause you a great deal of personal and financial misery.
Choosing An Unsecured Credit Card
It is a known fact that the American economy runs on credit. With the average American household having at least one credit card and averaging over three cards in a family of four, it almost becomes a necessity to get a card of your own. When selecting your card, the credit card chaser tool is designed to help. Simply access this free tool on this page, and within a few clicks you will have the power to take control and “chase” down the very best credit card for you and your lifestyle based on the exact criteria you specify. Let’s find your card right now!