Unsecured credit cards are offered everywhere from credit unions and national banks to department stores; however, applicants are generally expected to have fair or good credit. If you have had issues paying your debts in the past, but are able to show a renewed effort, you just might qualify for an unsecured credit card.
One good place to locate unsecured credit cards when you have a poor credit score is the credit card chaser.
Unsecured credit is like any other type of installment loan that requires no collateral. With unsecured lines of credit, creditors rely on your good name, according to the Federal Trade Commission. Although you can be sued if you fail to pay on an unsecured credit card, it will be much more difficult for the issuer to get monetary relief. This is why consumers with bad credit need to work much harder to be approved for credit cards than consumers with higher scores.
Not all credit card issuers have strict credit requirements. If you are financially secure or are willing to apply with a qualified co-applicant, you may not have to settle for an unsecured credit card that has a high APR. Start by searching the National Credit Union Administration for credit unions in your area that offer unsecured credit cards. Simply by joining a credit union and opening a checking account, you may have access to unsecured credit cards that do not require a minimum credit score.
Do all unsecured credit cards for consumers with poor credit charge higher interest rates?
If you have been fortunate enough to be selected to receive an unsecured credit card despite having bad credit, be aware that your APR will likely be very high. At the Investor.gov website, consumers can get suggestions on how to find relief from high interest credit cards. However, if you are able to afford the payments and believe that an unsecured credit card will help you to get back onto the path towards having good credit, it may be a good option for you.
Instead of applying for a high interest unsecured credit card, you might want to become the authorized user on a credit card with a low APR. In order to do this, you need to be 21 years of age or older and receive the consent of the cardholder. Remember that credit card companies can hold you liable for the total charges made on the account so pay close attention to the payment history and stay in communication with the account holder.
What types of fees do unsecured credit card companies charge?
While the Credit Card Accountability Responsibility and Disclosure Act of 2009 prevents credit card companies from making changes to user agreements at will, it does not specifically regulate the types of fees that can be charged to consumers. Of course, state usury laws set the total amount of interest charges that credit card customers are subject to, but not all U.S. states have interest caps.
Unsecured credit cardholders may have to pay annual maintenance fees, initiation fees, and charges for making late payments or going over their credit limits. You should ask your credit card company for a complete list of fees and other disclosures so that you can know what types of fees to anticipate.
When a credit card issuer decides to change its fee schedule in any way, the cardholder must agree. If you do not want to agree to pay higher or new fees imposed by your credit card company, you can voluntarily close your account with no penalty.
Can a person with bad credit be approved for an unsecured credit card without a co-signor?
The choices for unsecured credit card for consumers with poor credit histories are limited. This is because of the nature of the credit industry in general. High credit risk consumers are among the least likely to have a need for credit cards, mortgages or other installment loans simply because they have higher debt-to-income ratios. Even if they were qualified for unsecured credit cards based on their credit scores, other factors would prevent them from being accepted.
Having a co-signor will give you an edge when you apply for an unsecured line of credit, but realize that your application can still be denied. Credit scores can be approved tremendously with just a few years of solid repayment history, so bide your time and apply for a secured credit card if you absolutely need a credit card of some kind.
Visit credit card chaser and compare unsecured credit cards with low interest rates!
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