Unsecured Credit Cards

What You Need to Know about Unsecured Credit Cards

Unsecured credit cards are useful financial tools during emergencies. If you do not have cash and you are faced with an urgent expense, credit cards can be the quickest solution. However, there are people who cannot manage their unsecured credit cards well. They keep on spending but do not pay their dues on time. As a result, they damage their credit standing and mess up their reputation.

Here is where unsecured credit cards enter the scenario. Such credit cards are issued to applicants without the need to settle a down payment. If you need to spend cash for home repair or medicines and you do not have cash or you cannot use your secured credit card, this type of card should be your quickest resolve. Click here to read more.

Unsecured cards are also popular because they serve as a great tool to improve a person’s credit score. As you know, applying for a home loan or a car loan is stringent. The lender will check your credit history before approving your application. If they can see that you have mismanaged debt, the chances for your loan to get disapproved are high.Unsecured Credit Cards

If you are currently encumbered by your growing debt, financial experts advise that you apply for an unsecured credit card. However, you must remember that you are applying for another card, not to have a ticket for a shopping spree. Keep in mind that the card is a tool for you to improve your credit score. Of course, you will have to use this type of card for making purchases. The point is, you must diligently pay your debts on time to get a higher credit score.

Most credit card companies offer unsecured credit cards. Generally, financial advisers recommend getting three of this card from different providers. Each provider will submit their credit report to the appropriate agencies. If you can pay your bills on time for all the cards, the improvement will reflect on each. This way, you can build your credit score faster.

Another common tip is to keep your balances below 50% of your total credit limit. You will not score well if you do not use your credit card. This state is called no credit and no credit simply means no score. The score depends on how well you manage your debts and not on how big or how small your debt is.

Features of Unsecured Credit Cards

Unsecured credit cards come with a fixed or variable rate. For the fixed rate card, your payments will remain at a constant specific range. Variable rates fluctuate, meaning your monthly payment can increase or decrease depending on the adjustments. However, exceeding the credit limit can be disadvantageous because your interest rates will begin to increase.

Each card also comes with annual fees. To learn more about these important things about your unsecured card, look into the Schumer’s Box. You will find this box in the application form. It contains information about the rates for annual percentage, over the limit and late payment fees.

Indeed, unsecured cards are beneficial because they do not require down payment. The line of credit can be increased by the issuer and you can spend the money for whichever purpose. It is common for everyone to experience problems regarding cash flow. Sometimes, you just have to rely on your credit card to get through them. With a card, you can simply buy food or gas, things that you cannot go without for a day.

How to Get Unsecured Credit Cards

If this is your first time applying for an unsecured card, you must open a bank account first. If you already have one, it must be in good standing. Remember that credit card companies require a great deal of information about your credit history. If you have none, chances are your application will be disapproved.

Get a steady employment. Credit card companies want to make sure that you have a stable source of income to pay for your dues. Otherwise, you request will be denied. Also, your income must be enough to pay for the dues and other expenses. This will be crucial particularly if you do not have a credit history. Some credit card issuers call your employer to confirm if you are indeed employed.

Compare offers. There are a number of major credit card companies and although their offers look the same at the surface, their terms greatly vary. A few things you must consider in choosing a card are the credit limit, the annual fees, the interest rates and the rewards. Choose a card that you can afford.

Send your application. Usually, it takes a couple of weeks for a credit card company to process your application. Once you receive your card, treat it as cash and not a ticket that allows you to chop frivolously. Remember, you are applying for unsecured credit cards because you want to build your credit score.

Category: Unsecured Credit Cards

One comment on “Unsecured Credit Cards

  1. Pingback: Joint Credit Cards « Joint Credit Cards Joint Credit Cards

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