Watch Related Videos
comments
You can go online to apply for unsecured credit cards. However, before you apply for an unsecured credit card, compare the rates of interest offered by various banks. The interest rates applicable to an unsecured credit card are much higher than that applied to a general credit card.
Application
Following are the steps involved in applying for an unsecured credit card:
Research a bank that is offering a minimum rate of interest. Make sure you know if the interest rate is an introductory rate, and understand all the rates associated with the card. Many cards can have three or four different rates for different types of card usage.
When you have made the choice, you can fill out the form online. If you’re not comfortable with an online application, many banks will allow you to call to apply, or mail in a form.
The bank may ask for information on: your social security number, the amount of any existing loans, whether you have defaulted on any other card or loan, your income, and proof of employment.
Based on the details provided by you, the bank will proceed to approve the card to you. Sometimes the bank will need qualifying documentation, or will need to contact you. If this happens it doesn’t automatically mean you weren’t approved, so don’t jump out and start applying for a bunch of other cards.
If approved, the card will be delivered to you at your door step.
Since this is an unsecured card, you do not have to provide any collateral or deposit to obtain this card.
Advantages Of Unsecured Credit
The advantage of an unsecured credit card is that you need not worry about providing any security or collateral to the bank. You have access to the money instantly. It saves you from the hassle of carrying cash and the risk involved in carrying cash. It is a convenient method of paying your monthly bills, for example, you save your time when you pay your utility bills through your credit card. If you want to book a ticket or purchase something on the internet, having a credit card is a must.
Points to Remember
A few things that you should remember when you make use of an unsecured card:
When you use the card for your purchases, make sure you make full payment to the card in the same month, if possible. Otherwise, you end up paying more interest to the bank. This means you are paying more money for purchases made by you. For example, you bought merchandise worth $100 and you don’t pay it back ion full. The bank charges your card interest for the privilege of extending the credit. That $100 purchase could potentially cost as much as $130 after just one month. Allowing this balance to revolve over time will just make that amount go up. This is one way the bank makes money of the credit card consumer.
It’s also important to try to make more than just the minimum payment each month. It isn’t technically against any of the terms of the cards, and you are with in your right to make only the minimum payments. However, this will cost you valuable money in interest, and doesn’t look great on your credit. If other creditors see you are only making minimum payments it may be a flag to them that you are overextended. It can affect any future credit you get.
Be Smart
Just because you have a credit card doesn’t mean you have to use it all the time. Avoid purchasing expendable items, shop around for the best interest rates, and understand the terms to be an informed consumer.
How To Apply For A Unsecured Credit Card
|
Find the Best Credit Card
|
||||||||||||
