Unsecured Credit Cards: No Credit? No Problem

Often we come across this tag line: Unsecured Credit Cards: No credit? No Problem. Catchy Tag line! But how true is it? Is it possible to find unsecured credit cards with little to no credit?

In the times of economic crisis, when most of us are passing through a bad phase, it is more often than not that you come across tag lines in advertisements such as this one. When you see something like this, don’t jump on your feet to grab the card.

What is an Unsecured Credit Card?

An unsecured credit card is like any other credit card, with a difference that you don’t have to provide any collateral security or deposits as you would do in case of a secured credit card. But, remember, nothing in life comes free. If you want to enjoy credit without providing any security, then you must pay a higher interest rate on the credit amount.

Applying for an Unsecured Credit Card Online

It is really easy to apply for an unsecured credit card. You can apply for it online. You will be asked personal information regarding your name, address, contact number, age, social security number, details of any pending loan or credit card, your credit history etc.

Points to Remember

When you browse on the net for an unsecured credit card, just take care that you are not choosing a fake company. Dummy companies may lure you in with their offer of unsecured credit card and may misuse your personal details like your social security number. So, before applying for an unsecured credit card, either opt for a reputable company or ensure that you have done some background research about the company you are choosing.

Second point to remember is the interest rates and the annual fees. It is a common knowledge that the rate of interest and the annual fee can be very high for unsecured credit cards. So before applying, compare the rates and fees offered by various institutions.

Read the fine print to see what kind of penalties there are if a payment is missed or late. This can cause not only a ding on your credit, but it can cause the rates to increase dramatically.

Look for introductory rates and other promotions. Generally, the all banks offer an interest free credit period of about 6 months, if not longer.

Make Good Credit a Habit

A good credit habit is one in which you make all the repayments made through the credit card in the same month. When you follow a good credit habit, you save on interest costs. Secondly, you improve your credit rating.

When you have practiced good credit habit for quite some time, you will be able to get loans easily for your home or car.

Be Realistic

Having no credit won’t put out of the running for an unsecured card. It will end up limiting what you are able to qualify for though. While many companies will offer unsecured credit with no credit history, your credit lines may be low until you establish yourself. You will probably also not qualify for those elite cards that all the celebrities carry. Just work on building a good credit portfolio now and you can avoid future credit declines.

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