Unsecured Credit Cards

The credit card may be one of the most important financial “inventions” of the modern era. Millions of Americans have one – if not two, four, or more. In fact, the average American family has about $8,000 in credit card debt, according to some estimates. Being able to managing credit card payments allow people to build a good credit history and be able to do more thing, such as acquiring a mortgage loan and other big financial lines of credit. If you have developed and maintained a strong credit history over the years you could very well qualify for an unsecured credit card.

A secured credit card requires that a person put down an initial deposit in exchange for a comparable line of credit. For example, if you pay $1,500 to a credit card company in order to get a secured credit card, you will most likely get a credit line from $1,000 to $1,500. This way, if you fall behind on payments, or can no longer make them, the credit card company will be able to recover what it has lost with your deposit. Secured credit cards are usually for people with no credit history or a problematic credit history.

An unsecured credit card, on the other hand, is usually given to people who have very good credit histories, and so the credit card company feels comfortable extending them credit with no money down. Hence, for the credit card company, this is unsecured credit. They expect, based upon the individual’s track record that he or she will be able to make the minimum required monthly payment on whatever debt is accrued.

Establishing a good credit history is imperative in this day and age. If you’re wondering whether you qualify for an unsecured credit card, take the time to get your credit score. This can be done very easily on line. You will learn your credit rating, and from there deduce the likelihood of getting an unsecured card.

Before you attempt to get an unsecured credit card, it makes a lot of sense to sit down with a financial advisor and go over your financial record in great detail.