Are the features of unsecured credit cards good or bad?

Unsecured credit cards are a type of credit cards whose credit is secured neither by any home equity nor by a check from your banking account. In fact, unsecured credit cards aren't secured by anything except your promise to make payments as agreed.

Normally, credit card limits are set as a percentage of deposits (between 80 and 300 percent). As unsecured cards have no security from the checking account, the rate of interest is much higher on these cards.

But you will be surprised to know that most credit cards fall in this category! And reputed unsecured credit cards normally carry a maximum annual fee of $ 60, with anything more than that being a rip-off.

Unsecured credit cards for people with bad credit

Unsecured credit cards for bad credit are offered for People who have ith a bad credit history. can own only an unsecured credit card, and no other. Unsecured credit cards after bankruptcy and even normally has The disadvantages high interest rate. The other disadvantage of bad credit unsecured credit cards are that credit limits are low a and the interest rates are higher. And chances are high that people with bad credit may have their application rejected.

Applying for unsecured credit cards

Unsecured credit card advertisements are all over the place - on the Internet, in finance magazines, and in newspapers - you just can't miss them. You can call up the company and have an application form sent over or take a printout from their website.

Under Federal law, all credit card solicitations and applications must include important information such as the following:

The Annual Percentage Rate (APR):

This is the rate at which you are charged on the balance you carry over. Many credit cards offer a low introductory rate. So the application form should carry both these rates. There are different APRs for cash advances, transfer of balances, and on delayed payments.

Variable rate information:

If the APR is variable then the application must describe how the variable rate will be determined.

Grace, or free period:

This is the number of days you get to pay for the purchases you've made. No interest is charged on this period.

Method of computing interest:

The application form should contain the method the credit card company will employ while charging interest on your carry-over balance.

Annual fee:

Just because the credit card company issued you a card, you have to pay them an annual fee.

Transaction fee:

This is the fee charged on cash advances.

Balance transfer fee:

This fee is charged when you transfer a balance from one credit card to another.

Late payment fee:

This is the fee charged when you're late in paying the card dues.

Over-Credit-Limit fee:

This fee is charged when you exceed the limit set by the credit card company.

How to make the best use of unsecured credit cards?

Okay, now it's assumed that you have understood the credit card lingo, compared terms and conditions across various credit cards, and have gone in for the best-suited-for-you unsecured credit card.

Now, these are some tips on how you should use it:

Rules 1 to 10 - Live within your means and don't ape your neighbors, relations or friends who are richer than thou.
Use your unsecured credit card strictly for necessities rather than comforts and luxuries.
Credit cards are just too easy to use, and once you start enjoying buying things on credit, you'll most likely get into the habit of overspending.
For rule 11 onwards, read on.
Pay your credit card bills on times and pay them in full. Unsecured credit cards carry a higher rate of interest and you don't want that to keep adding to your carry-over balance.
Credit card companies normally require that you should pay a small percentage - a minimum balance - of your total debt. Don't fall for that, as a minimum balance
payment translates to a maximum interest rate. Remember you have a different APR for normal debt and another, higher APR for deferred debt.
If you're into paying your bill in full, ask your credit card company for a grace or a free period (if your credit card doesn't feature such a period, or features a very short grace period). As explained above, grace period is the number of days you get to pay your purchases. A 25-day grace period will be just fine.
Don't fall for low introductory offers. If any credit card company is offering a ridiculously low interest rate that looks hard to resist, then you should start reading what happens after this introductory offer expires. You will find the beautiful introductory angelic rates turning into an ugly, demonic rate that looks all set to gobble up your cash.
Credit card companies have hundreds of offers with varying fees on every offer. Prove to your card company that you are a good customer and then negotiate the fees and the interest.

Why opt for Secured Credit Cards?
Credit Card Fraud! Be careful of your credit
Be sure your online credit card processing is secure

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