Print Article for : Bad Credit Unsecured Credit Card

Your Online Guide » Credit Cards » Types of Credit Cards

[B122]Bad Credit Unsecured Credit Card

by Bill Smith, Bil

Many people believe that because of their bad credit, unsecured credit cards are not available to them. While it may be more difficult, there are options for people with bad credit who want an unsecured credit card to build their credit or have available for use in an emergency. While a secured credit card is the most commonly recommended option for people with bad credit, unsecured credit cards ARE available - even for those with the worst credit.

Bad Credit: Unsecured Credit Cards vs. Secured Credit Cards

One of the easiest ways to get a credit card when you have bad credit is to opt for a secured credit card. With a secured credit card, you deposit money in a bank designated by the credit card company to serve as a 'security deposit' - an assurance that they'll get their money if you default on payments. Depending on the lender, that deposit might be equal to your desired credit limit, or slightly higher or lower. A security deposit of $300, for instance, might get you a $150 line of credit with one company, a $300 line of credit with another, and a $400 one with yet a third. The interest rate is generally competitive, since the company has a guarantee of getting its money if you don't make payments.

An unsecured credit card requires no security deposit. A bad credit unsecured credit card will often have either a high APR (annual percentage rate), high fees, or both. How do the two stack up against each other? Here's a comparison from two actual credit card offers that are sitting on my desk as I write:

Secured Credit Card
Security Deposit: $250
Annual Fee: $35
Setup Fee: $35
APR: 15.40%

Credit Limit Increases: $100 increments, each require $100 deposit

Bottom Line: It will cost you $370 to maintain a $250 credit limit for the first year, with at least $250 up front, at an APR of 15.40%. You'll have $170 available credit upon receipt of your card. You'll have to put up an additional $100 every time you want to increase your credit limit.

Bad Credit Unsecured Credit Card
Annual Fee: $48
Setup Fee: $29
Participation Fee: $72 (annual, billed at $6 monthly)
Program Fee: $95 (one time fee)
APR: 9.9%

Credit Limit Increases: $25 (per increase of $100, at their discretion)

Bottom line: It will cost you $244 for the first year, all of it billed to your credit card on your first statement, to maintain a $250 credit limit with an APR of 9.9%. You'll have $72 credit available upon receipt of your card.

In the long run, while a bad credit unsecured credit card may cost you more, you won't be tying up your money up front. Either card will help repair your credit as you make payments on time and regularly, but the unsecured card has an APR that's almost 5% lower. You're the only one who can decide which is the better option for you - but it makes sense to weigh all your options before you decide that your only way to have a credit card is with a security deposit.

Free from the collateral practice and its drawbacks, you get an opportunity to borrow amount between £1,000 and £25,000 for a fixed period. The amount has to be reimbursed within the period from 1-10 years. In a worry free manner, you can keep on repaying the amount. The loan amount stages for its applicants come against a slightly higher rate of interest. Moreover, the interest rates vary from one lender to another and the best possible way of spotting reasonable rates are colleting and comparing the loan quotes of different lenders. As your credit status is not economically favourable for you, so you should hunt for the low and cheap interest rates.

The loan amount proves to be effective and worthy because you can easily stabilize the bad credit issue before it bring more damage to your credit profile. Such, activities shows a positive indication for your credit and you can rebuild you lost credit status. Bad credit holders can wipe crucial credit issues like CCJs, defaults, arrears, late payments, bankruptcy and so related in an easy going manner. There are no limitations of utilization of funds and you can easily invest them in meeting personal demands. If you follow a rational budget, then you can fulfil personal ends like buying a car, weddings, going for holidays, higher education of children, and consolidation of multiple debts.

Availing a loan has become easy and simple because online is equipped with the high-end technology. Considering this application method let you approve the loan in a comfortable manner and around the globe. So, bad credit unsecured loans have made life easier for persons who are striving with bad credit.

Article Source : Best Credit Cards For Students

About Author

Both Bill Smith & Robert Langdon are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Bill Smith has sinced written about articles on various topics from Home Management, Debt Consolidation and Credit Cards. . Bill Smith's top article generates over 14800 views. to your Favourites.

Robert Langdon has sinced written about articles on various topics from Bad Credit Loans, Debts Loans and Bad Credit Loans. Robert Langdon holds a Bachelor’s degree in Commerce from CPIT and has completed his master’s in Business Administration from IGNOU. He is working as financial consultant for Fast Unsecured Loans UK. To find a. Robert Langdon's top article generates over 165000 views. to your Favourites.