It is almost a necessity to have at least one major credit card these days. You are almost always required to have a credit card to book airline flights, make hotel reservations and to rent a car, among other things. There are two major forms of credit cards, an unsecured credit card and a secured credit card.
An unsecured credit does not require you to have any collateral for the card. When you apply, you will be approved or rejected for the card based on your credit rating and income. If you do not qualify for an unsecured credit card, you can apply for a secured credit card. A secured credit card requires you to put down a cash deposit with the bank that is issuing the credit card. The deposit serves as the collateral and the funds will be used to pay on the balance of the credit card if you default.
There are several advantages to having an unsecured credit card. They usually carry a lower interest rate than a secured credit card and also have fewer fees and restrictions. However, if you have poor credit or an insufficient credit history, a secured credit card is a good option for you to help rebuild or establish your credit and will also provide you with a major credit card that you can use.
To get the best deal on a secured credit card you should do some comparison shopping. You can contact local credit unions and banks and also do research online. There are websites that compare and review various credit card offers. You will need to read the fine print carefully on the secured credit card offers you are considering, as the fees, eligibility criteria and deposit requirements can vary quite a bit from card to card.
One thing that is very important to check for if you are using the secured credit card to help rebuild or establish your credit is to make sure the credit card company reports to all three of the major credit bureaus. These include Experian, Equifax and TransUnion. If the card issuer does not report to all three of the bureaus using the card will not help you to build or improve your credit rating. You also need to check to make sure that the card will not be flagged as a secured credit card on you credit report.
When choosing which secured card to select you should also check to see if there is an option to convert to an unsecured credit card in the future once you have made timely and consistent payments to the credit card company. Once you are eligible for an unsecured credit card, you should definitely switch over as there are several important advantages to an unsecured card such as a lower interest rate and fewer fees and restrictions.