Unsecured credit cards can be treated as the most commonly used credit cards. When compared to a secured credit card this card carries lower fees and usage limitations. The topics that are explained in this article are as follows
- How unsecured credit cards can be applied for?
- What are the pre-requisites for getting an unsecured credit card?
- What are the tips that help in using unsecured credit cards?
If you are not sure what type of credit card you have, chances are that you have an unsecured credit card. This is by far the most common type of credit card for most customers, as it generally carries fewer fees and limitations than a secured card. Quite simply, unsecured credit cards are simply credit cards that do not use collateral. In general, you need to have a good credit rating to apply for this type of card. However, you do not need capital or a deposit in a bank account to apply for this type of card. As long as your credit score is good enough, you will probably want a unsecured credit card.
How to Apply For Unsecured Credit Cards
Applying for unsecured credit cards can be done at your financial institution, over the phone, or online. In general, applying for credit cards take several business days. Before you even begin to apply, you will want to call some credit card companies and banks to get their best unsecured credit card offers. Spend a few days reading this information over carefully in order to find the card that is best for you. Once you have done so, you will need to fill out an application. This application will ask some identifying and financial questions about yourself. The application will also give the credit card company or bank the right to look up your credit score.
Depending on your credit rating, the credit card company will decide whether to issue you a card or not. Basically, the credit card company will use your information to determine how likely you are to repay your debts. If your credit history suggests that you are good at meeting your financial responsibilities, you will be issued a card. Depending on how good your credit is, you may be given a higher (or lower) limit card with higher (or lower) interest rates. If your credit history suggests that you are not good at repaying your debts, then you may be rejected for an unsecured card. However, you will be able to apply for a secured or prepaid credit card and use that card to build up your credit score before applying again.
Are Unsecured Credit Cards For You?
Although today it seems as though everyone – including teens – have credit cards, unsecured credit cards are a risk. The average North American has a credit card debt of a few thousand dollars, and unsecured debt tends to lead to large debts, thanks to high interest rates and accumulating interest. So you need to weigh the matter carefully and make an informed decision whether unsecured credit cards are for you.
When it comes to using unsecured credit cards, there are a few basic tips that most experts suggest all credit card users follow scrupulously:
- Are over 18
Most credit cards are only issued to those who have reached the age of majority. - Have an income
You need to have an income that can repay your credit card balance each month. - Have a good credit history
You can call the credit bureaus listed in your phone book to find out what your credit history is. High credit scores will allow you to enjoy the best interest rates and credit limits. Scores that are too low may not make you eligible for credit. - Have had a bank account, job, or bills in your name for more than six months
This is important because it helps to establish a credit history. If your credit history is too short, you may not qualify for unsecured credit. - Need shopping convenience
Many retailers and locations have arranged for unsecured credit cards processing, meaning that you can use your card in many places. Even when you travel overseas, you can use your card. If this is important for you, you may wish to consider credit cards. - Have no gambling or spending problems
Credit cards are very tempting to use when you see something you really want but cannot afford. If you are the type of person who has problems with denying yourself something you cannot afford, credit cards can push you deep into debt.
Using Unsecured Credit Cards
Once you have an unsecured credit card, you will have to activate it. The instructions on how to do this will arrive with your card. You will also have to sign the back of your card. Once you have done all this, you will be able to use your card to make purchases over the phone, online, and at stores. You will even be able to put some of your bills on your card so that they will be paid automatically.
Once a month, your card bill and statement will arrive. You will have the option of paying a small percentage of your spending or you will have the option of paying off your entire balance. If at all possible, you will want to pay off your entire balance. This is because any amount left on your bill will be subject to high interest rates.
- Pay your bills fully and on time
This will prevent late charges and interest rates and will ensure that your credit score remains good. - Maintain a minimum number of credit accounts
The more credit cards you have, the easier it will be for you to get into debt. Also, your credit score will suffer if you overextend your credit. - Keep receipts
They are your proof of purchases made. If you need to return or dispute an item, you need these papers to prove your case. - Compare receipts to your bills once a month
Errors and inconsistencies do sometimes show up on credit cards, and you will want to report them so that you do not end paying more on your bills than you need to. - Report stolen cards right away
Otherwise, someone may use your card to make charges. - Keep your credit card information secure
Always keep your credit card tucked away securely, away from your wallet. Do not give your credit card information out to anyone unless you need to make a purchase and do not leave your card lying around where others may see it. For many credit card users, credit cards that are unsecured are a good match.
Now that you know how these cards work, you can decide for yourself whether you want to join the millions of customers out there who use unsecured credit cards for their purchases.
