Difference Between Secured And Unsecured Credit Card: FAQs
Who is a secured credit card good for? Secured cards are typically used by people with poor credit that cannot qualify for an unsecured card.
Do unsecured credit cards build credit?. One of the benefits people with bad credit can reap from using a secured card is its ability to rebuild credit score, this is, of course, can only be achieved if the cardholders comply with their loan obligations.
What is the Difference Between Secured Vs Unsecured Credit Card?
What is a secured credit card? A secured credit card requires that the cardholder pledge collateral. They do this by depositing money with the issuer, the money can then be accessed when making a purchase. Many of them report to the major credit bureaus which means that by using them responsibly, cardholders have the opportunity to repair and rebuild damaged credit ratings.
What is an unsecured credit card? An unsecured credit card is the opposite of a secured credit card in that it extends a line of credit to the cardholder without having them pledge any collateral.
What to consider before Applying for an Unsecured Credit Card?
Since there are so many cards out there, finding the right one may have begun to feel like finding the proverbial needle in a haystack. Cut through the card clutter by following a few quick tips to jump-start your unsecured credit card hunt.
There are different ways to find the right unsecured credit cards, you would need to identify exactly what your credit needs are. If you carry a balance forward from one month to the next then you definitely want to compare cards with a low APR. You may also want to look into balance transfer options if applicable.
Bellow are things to consider before applying for an unsecured credit cards
Look for a fixed APR. The annual percentage rate is the amount of interest you will pay for the items that you charge to your new unsecured credit card.
Cards that feature a variable rate are less favorable than fixed-rate cards because you know the amount of interest that will be charged on outstanding balances on your card. A variable rate means that the rate of interest will fluctuate with market conditions which are based on the prime rate as published in daily financials like the Wall Street Journal.
By obtaining a fixed rate card, you lock in the amount of interest that can be charged to your account when you use your new unsecured card.
Go For Great Introductory Offers. Most of your options for a new, unsecured credit card will feature an introductory offer for the chosen card. Look for introductory offers that feature no interest for a period of time, preferably during the first year. Be careful, however, to read the terms and conditions of the offer carefully.
Oftentimes, a payment that is a day or two late will cause your zero percent interest rate to rise to a higher rate for the life of the card.
Transfer Balance Options. If you find an unsecured card that offers a transfer balance option, you might realize some additional savings by transferring balances from other cards (some issuers even allow you to transfer department store, gas, and other cards to the new card) over to a new, lower rate. The best-unsecured credit card would feature no fees for doing the balance transfer option, and a locked in the rate on any balances that you decide to transfer over.
Cards Without Fees . With the vast amount of competition in the credit card industry, you should be able to easily obtain an unsecured credit card that does not have any fees associated with it other than interest. This means saying no to cards with annual fees (some cards have annual fees as high as $250), monthly fees, maintenance fees, or account fees. Also, the card you choose should let you do a cash advance with the smallest possible fee, usually no more than 1% of the amount of the advance, or $5, whichever is greatest.
Perks For Good Customers.A really great unsecured credit card will have some type of cardholder benefit program. Look for an unsecured credit card that offers points towards airline miles, merchandise credit, or cash back on purchases.
Best Unsecured Credit Card For Bad Credit 2018
A good unsecured credit card to rebuild credit score must have all the above attributes and more.
Some of the unsecured credit cards we have been able to shortlist are :
1. Fingerhut Credit Account
2. Milestone Mastercard Bad Credit Considered
Credit One Bank’s Unsecured Visa with Free Credit Score Tracking
4.First Access Visa Card
5. Total Visa Card
6. Indigo’ Mastercard for Less than Perfect Credit
7. Milestone’ Mastercard with Free Choice of Card Image.
Having a bad credit history is not a death sentence as you can use the above cards to rebuild your credit score.