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If you have held a credit card before, you may be familiar with the terminology involved with them such as secured, unsecured, limit and debt. Whether you have or have not held a card before it is a reasonable and wise idea to do your research before-hand and be certain about which type of card is right for you and your needs.
There are so many different offers out there that it may take some time to sort through the varying promotions, interest rates, terms and conditions, etc., but it will be worth it in the end to know that you have chosen the right card.
When you are making the decision to apply for an unsecured card, what you are looking for is a free and clear credit card that requires no damage deposit and is not a prepaid card. It generally means that your credit is in good standing because you do not need to pay in advance for the right to use the card. You will be given a reasonable limit, lower at first, and will also be given the chance to slowly increase the credit limit on the card.
If you have had a lot of credit troubles in the past it may be difficult for you to obtain an unsecured credit card. One way to “redeem” your credit is to make regular payments and purchases on a secured card. So, the choice is made and you’ve opted for unsecured. You will be asked your credit history, banking information, and work history on your credit card application.
By filling out the application you are allowing the providers to search your credit history. Once they have approved you, there will be a set limit at your disposal. This is where the “how it works and how to use it” information becomes important.
Taking the right road...
Having a credit card is like having to prove yourself at the office. You’re given a little bit of responsibility at a time and once you’ve shown how well you handle it you are given more. Slow, gradual increases allow you to get used to the extra job load. This is very similar to credit card use. You are able to make purchases on your credit card only being charged a low annual interest fee per month on the balance that you have accrued.
Once you have shown that you can make regular, monthly minimum payments you will be given the option of increasing your limit. This can be a very valuable credit builder on your behalf. What you want to avoid, however, is getting in over your head with excessive spending without making the required payments.
Many people find it necessary, for whatever reason, to spend beyond their means. Perhaps a spouse has lost their job or you were a bit short this month. This is definitely an area where credit cards come in handy. However, to be truly effective and to be used properly one must manage these situations on the whole.
Any provider or lender is able to offer you sound advice on how to build a strong credit rating and a financial advisor is able to give you monthly budgeting advice that will help you to stay on track and use your credit cards so they benefit you in the future. Using your card right means you can manage the amount you spend with your monthly budget.
The lenders of an unsecured credit card, a card that suggests you do not need collateral, expect this management from you. It’s not that you can make purchases, even extravagant purchases, it’s about what you do afterwards that affects your future.
In fact, credit card companies make their money by you making purchases and are even happy for their customers to carry a balance. Carrying a balance ensures them interest fees on whatever the balance of the account is. This is “what’s in it for them”.
Who’s it all for?
An unsecured credit card is deemed to be the kind of card you want having fewer boundaries and no prepayments. This is not an unattainable card for those who have had credit problems in the past.
In today’s credit market there are many lenders willing to offer unsecured credit cards even to those who have struggled with repayments. Believe me, there are many in this category. It is amazing how quickly people can get “over their heads”. Without even being frivolous life can stack up on you and deal you a difficult blows.
When a credit card may be the only option for survival who stops to think ahead. But alas, someone has thought for you. A few wrong turns do not take you out to pasture anymore…unsecured cards are readily available without hassles or limits to anyone.
You will, of course, have to find a lender that offers cards to those with “poor” credit histories. Online alone there are literally hundreds of websites with willing lenders. Do not let poor credit history prevent you from reestablishing yourself.
It’s an interesting paradox…some people never get credit cards because they believe in buying only what they can afford to pay for and think that they never want to ‘rack up a card’ and establish a poor credit rating. Valiant thoughts but having a credit card or a small personal loan is in fact what gives us a credit rating.
Showing that we can pay off small amounts at a time, on time, demonstrates to lenders that we are responsible and capable of managing our credit, thus establishing it! In the future, when you want to make a purchase such as a car or even a house this established credit history is what enables lenders to recognize your capability to repay.
Even if you have had trouble in the past reestablishing your credit in a positive way can still open up many doors for you. Fortunately, there are a number of lenders willing to help you reestablish and rebuild your financial future.
Best use …
In a fairy tale world, none of us would need credit cards because we could readily afford all that we need. However, as we all know, there are no fairy tale endings
here…. only the ones we establish for ourselves.
Using your cards wisely is something that will benefit your financial future. If you have any uncertainty about how to establish a credit rating, manage a budget, reestablish your credit, or apply for credit cards your online resources are endless. It is a simple process that consists of an application form and an approval from the lender. A few small steps and you are on the path to a better financial future!
About the Author:
Grant Donald is a successful internet entrepreneur and author whose websites provide moneysaving and credit management advice for consumers purchasing a variety of consumer financial products such as
no annual fee credit cards
and balance transfer credit cards.
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