Credit cards has saved us all the hassle of carrying money whenever we go out shopping. They are basically of two types, i.e., secured and unsecured. Secured credit cards are those which are obtained against a collateral. A person sets a credit limit for himself by depositing money in his account in order to get a secured credit card. On the other hand, unsecured cards are chiefly given to people who have a good credit history. The credit card company checks the previous records, bank accounts, etc., of a person, and based on them, sets the person’s credit limit. The individual, at the end of the month, receives a bill of all the expenses, which he pays to the company.
Unsecured credit cards do not require any collateral, however, a certain amount of membership fees might have to be paid. And if a person has a bad credit history, the membership, processing, and account opening fees will be more. There are a number of companies which offer unsecured credit cards, making it difficult for people to choose the best ones among them. So if you find yourself in this dilemma, here is some useful information to help you out.
As mentioned above, these cards are usually offered to people with a good credit report. So, if at all they are offered to somebody who has faced bankruptcy, the interest rates will be comparatively higher. This is because, a person offers no collateral for unsecured cards, making him a risky customer for the company. Still, if you search properly and compare the interest rates of different credit cards, you will find that some of them offer low interest rates as compared to others. Thus, the best ones are those which offer lower interest rates when compared to those offered by other companies.
Account Opening and Membership Fees
If you have a bad credit history, it is most likely that the credit card companies will charge a very high account opening fee from you. In addition to that, since you have bad credit scores, your credit limit, i.e., the amount that you are allowed to spend will be comparatively lesser than other card holders. The annual membership fees which companies either charge on a monthly or yearly basis, is much higher for people with bad credit. Still, you will be able to find companies which charge lesser account opening and membership fees.
Reputed Credit Card Issuer
If you are going in for an unsecured credit card to rebuild your credit history, see to it that the issuer who you finally opt for has a good reputation. To ensure this, before opting for the card, see that the company reports to either of Experian, TransUnion or Equifax, the three prominent credit bureaus.
Go in for credit cards which offer cash back on purchases that you make through it. This cash back may be offered in different ways by different companies. For example, some companies may issue a check after every quarter, while others may add cash to your balance. Some companies may even give gift certificates or coupons to its customers.
Some credit card companies are affiliated with certain airline companies, and hence, if you are a frequent flier, the company will automatically transfer airline miles to the frequent flier account you have with the airline. Thus, by going in for such cards, you are actually cutting down on your travel expenses.
One good thing about these cards is that they will help you improve your credit history immensely, especially if you pay your bills on time and do not exceed the credit limit. If you are disciplined in your usage, and are able to build a good relationship with your lender, you will soon start reaping its benefits. The lender might waive off the annual fee or he may increase your credit limit, and he may even extend you a home loan. So, the key to getting the best deals vis-a-vis unsecured cards is to keep the balance less and make timely payments.