Benefits of Unsecured Credit Cards
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There are many benefits to choosing an unsecured credit card, the first of which is the low setup fee. Unlike a secured credit card, you will not have to pay the entire amount of your limit before you can use your credit card. Instead, you will receive your credit card with the full limit available to you. In many cases, any fees associated with membership can be charged to your credit card in your first month, meaning that in order to receive your card, you will pay no fees.
Having the ability to instantly use your credit card in the case of an emergency is also useful. Rather than have to wait until you can afford to pay off the initial deposit, you will have the full force of your credit limit available to you. If your car breaks down the next day, you don't have to worry about where you're going to get the money right now to have it fixed, plus paying for a credit card deposit. Instead, you can use your credit card to have your car fixed, and then make payments on the balance as you can afford them.
Choosing an Unsecured Credit Card: Reason 2
Most unsecured credit cards will have a higher limit than secured credit cards. This means that you have more spending power to utilize. If you need a large sum of money to pay for a good or service, you will have a better chance of being able to use your credit card if it is unsecured. Secured credit cards, because they are generally for those with bad credit, will by nature have lower limits.
On top of this, you may still be in the initial stages of getting your credit card, where you have yet to pay off your deposit. Having an unsecured credit card will allow you to utilize your credit to the fullest extend immediately, and also give you the greater purchasing power you will need for those high priced purchases.
Choosing an Unsecured Credit Card: Reason 3
Unsecured credit cards will report to the three major credit agencies more often than secured credit cards. Because the company you received your credit card from is taking a larger risk on you, they are more apt to report your history with them on a constant basis. This means that if you keep your credit card in good standing, your credit score will increase faster.
The downside to this is that if you miss a payment, you can be assured that your credit card company will send in a report to a credit agency, noting your tardiness. While this can damage your credit, so long as you manage your credit wisely, you are more likely to see an increased credit score by applying and being accepted for a credit card that is unsecured.
Keeping track of your finances and effectively managing your credit card payments will go a long way towards improving your credit score, and an unsecured credit card is the best credit card to have for this purpose, as it maximizes your flexibility and demonstrates responsibility in the credit card world.
Posted by jonathan on February 03, 2005 at 06:40 PM