Unsecured Credit Cards

Written by Jared Vincenti
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There are two basic types of credit card: secured and unsecured. These terms have nothing to do with the security to the customer, but rather to the bank. Secured cards are often issued to people with no credit or bad credit, as a secured card represents no risk to the creditor.

A secured card requires a balance deposited by the client before the card is issued. This balance is kept by the creditor as "security" on the card, thus the name of a secured card. If the credit card holder neglects to make a payment, the amount due is drawn from the secured account, thus assuring the creditor that no money will be lost in issuing the card.

How to Get Unsecured Credit Cards

In order to qualify for an unsecured credit card, you must have average credit or better. By having a good credit score, the creditor is shown that you have, in the past, paid off your debts promptly. Knowing that you are good for the money lent to you, a credit card company or bank will issue you a credit card without a down payment. This is an unsecured credit card.

If you have damaged credit, or if you have ever filed for bankruptcy, you may not be able to get an unsecured credit card. If you have never held a credit card before, you might be able to get an unsecured credit card, but may want to consider building your credit on a secured card. Having good credit is all it takes to get an unsecured card, and making regular payments on any kind of card is the best way to build credit.

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