Best Unsecured Credit Cards for Bad Credit
Introduction of credit cards has saved us all the hassle of carrying money whenever we go out for shopping. They are basically of two types i.e. secured and unsecured. Secured credit cards are those which are obtained against a collateral. A person sets a credit limit for himself by depositing money in his account in order to get a secured credit card. On the other hand, unsecured cards are chiefly given to people who have a good credit history. The credit card company checks the previous record, bank accounts, etc. of a person and based on them, sets the person's credit limit. A person at the end of the month receives a bill of all the expenses, which he pays to the company.
Unsecured credit cards do not require any collateral, however a certain amount of membership fees might have to be paid. And if a person has a bad credit history, the membership, processing and account opening fees will be even more. There are a number of companies which offer unsecured credit cards making it difficult for people to choose the best ones among them. So if you find yourself in this dilemma, here is some useful information to help you out.
Interest Rates
As mentioned above, these cards are usually offered to people with a good credit report. So if at all they are offered to somebody who has faced bankruptcy, the interest rates on it will be comparatively higher. This is because a person offers no collateral for unsecured cards, making him a risky customer for the company. Still, if you search properly and compare the interest rates of different credit cards, you will find that some of them offer low interest rates than others. Thus, the best unsecured credit cards after bankruptcy are those which offer lower interest rates when compared to those offered by other companies.
Account Opening and Membership Fees
If you have a bad credit history, it is most likely that the credit card companies will charge a very high account opening fees from you. In addition to that, since you have bad credit scores, your credit limit i.e. the amount that you are allowed to spend will be comparatively lesser than other card holders too. The annual membership fees which companies either charge on a monthly or yearly basis, is much higher for people with bad credit. So this high membership fees will be applicable to you as well. Still, if you search the market properly, you will be able to find companies which charge lesser account opening and membership fees. So the best ones are those which offer you a comparatively better deal.
Reputed Credit Card Issuer
If you are going in for an unsecured credit card to rebuild credit history, see to it that the issuer that you finally opt for has a good reputation. To ensure this, before opting for the card see that the credit card company reports to either of Experian, TransUnion or Equifax, the three prominent credit bureaus.
Cash Back
Go in for credit cards which offer cash back on purchases that you make through it. The cash back may be offered in different ways by different companies. For example, some companies may issue a check after every quarter while some may add cash to your balance. Some companies may even give gift certificates or coupons to its customers.
Airline Miles
Some credit card companies are affiliated with certain airline companies and hence if you are a frequent flier, the company will automatically transfer airline miles to the frequent flier account you have with the airline. Thus, by going in for such cards, you are actually cutting down on your travel expenses.
One good thing about these cards is that they will help you to improve your credit history immensely, especially if you pay your bills on time and do not exceed the credit limit. If you are disciplined in your usage and are able to build a good relationship with your lender, you will soon start reaping its benefits. The lender might waive off the annual fee or he may increase your credit limit and he may even extend you a home loan. So, the key to getting the best deals vis-a-vis unsecured cards is to keep the balance less and make timely payments.
