How To Get An Unsecured Credit Card

Introduction

People with a poor credit score will often find it difficult to qualify for a credit card. Fortunately, for such people, they can now gain access to credit through unsecured credit cards, regardless of their credit score. Banks will typically offer this type of credit card to people with a poor credit score, without requesting for any collateral against the loan. Here are some of the benefits and major factors to look into, while applying for this type of credit card.

Step 1

Most people tend to assume that if they don’t have any credit cards or maintain any cheap loans, that their credit score will be 100% perfect. However, the fact is, if you haven’t been utilizing a credit card or paying off a loan, chances are that your credit score is going to be lower than some who has a credit card and maintains a loan. In most circumstance, poor credit card ratings are a result of financial problems, such a foreclosure or bankruptcy filing. This type of people will typically be locked out from accessing credit in most financial institutions. Fortunately, some financial institutions will be willing to take the risk on people with a poor credit score by offering them unsecured credit cards.

Step 2

People with bad credit can search for unsecured credit cards over the internet, where they will find a huge number of offers from credit card issuers. You could also ask your local bank if they offer unsecured credit cards and the terms and conditions attached to that card.

Step 3

Considering the huge number of offers for unsecured credit cards, it is always advisable to shop around to get the best possible card for your financial needs. Here are some of the factors you will need to look into:
Compare APR: different lenders will charge different interest rates or APR’s for their credit cards. The lower the APR the cheaper the credit will be.

Step 4

Compare fees: lenders will often charge their clients certain fees, while using their unsecured credit cards. For instance, they could charge a set up fee, annual fee, monthly processing fee and a processing fee. Lenders will either charge all or some of this charges and at different costs. Make sure to compare those fees, before you make your mind.

Step 5

Compare rewards: some lenders will offer unsecured credit card holders rewards for using their credit cards. These rewards can include free products, air miles, and cash back, etc. select a card that best fits your spending habits and lifestyle, to get the most out of it.

Tips

Once you have successfully applied for an unsecured credit card, you will be assigned a credit limit by your card issuer. Due to the risk assumed by credit card issuers on people with poor credit ratings, they will typically charge a higher rate of interest on the loan. But this should not be a problem if you intend to pay off your balances on time.

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