Credit Cards Secured vs. UnsecuredKnowing the differences between the credit card types is the first step in selecting the credit card that is best suited for you. There are many things that a person should look at before making that choice of the credit card that you prefer.
Unsecured Credit Cards
The Unsecured Credit Cards are very simple in the fact you apply for a line of credit and when approved you are given a certain limit that you may spend. In most cases the line of credit can run from $300 to $500 until you have proven that you are a good credit risk before your line of credit is increased. That seems very simple but there are some important factors that you need to be made aware.
First what is the APR rate that you are going to be charged for the credit card? This is very important as you do not want to end up spending more interest than the amount of your loan. The other major concern for customers who select a credit card is to find out what your late fees will be and do you get any grace period before they start charging you late fees. If you’re not very careful you can end up out a lot of money just for late fees and interest rates. When you decide on your lender then check out what their rates and fees are before you sign the agreement.
The next thing that you want to consider is what they are offering you in perks. Today many credit card companies offer their customers perks, like frequent flyer miles, points where you can buy products from a merchandise catalog, or even free nights stay in hotels and motels. All these perks are very good especially for those who travel a lot and need some free frequent flyer miles or perhaps a stay in the motel of their choice. The merchandise catalog is good too because you can get electronic products, clothes, jewelry, house wares and many other items. When you choose your lender find out exactly what the agreement is and what the perks will be.
Secured Credit Cards
The secured credit card is one in which you must make a deposit in the amount of credit line that you are seeking to get. The lender holds your deposit in a secured savings account and you are still required to make your regular monthly payments. Caution that you watch the agreement because you do not want to borrow $300 and find that your interest rate, late fees and yearly membership fees take up most of your loan. You still have to pay back the loan at the amount of the agreement. Many people forget that the money placed in the savings account is a security that you will pay the lender not money that they can withdraw. After about a year of proving that you make payments on time the lenders will normally let you have an unsecured credit card and return your savings account money. The perks are basically the same for secured credit cards as they are for unsecured credit cards. You just need to check with the lender on what they are offering.
