Differences Between Secured And Unsecured Credit Cards

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Differences Between Secured And Unsecured Credit
Cards
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• For sure, you chose to use credit cards because
  you are aware of its advantages, consumers
  protection from fraud, and perks such as extended
  warranties, purchase protection, and guaranteed
  returns. Above all, credit cards allow you to pay
  your insurance, school, utility, and other bills
  conveniently.

The question here is, are you aware of the
differences between a secured and unsecured
credit card? To explain this, we have here two
scenarios
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• 1st Scenario
• Sam is a hotel manager, has a stable monthly
  income, and makes sure he can be in the ideal 30
  debt-to-income ratio. He has a decent credit
  history and card issuers are behind him to offer
  him new credit cards. 

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• 2nd Scenario
• George opened a new clothing enterprise, but his
  cash flow is not yet stable and his credit
  history went bad because of his previous business
  project. No issuer comes to him to offer him a
  credit card or any loan. 

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• Will you believe both of them can get a credit
  card? You should, because Sam who has a clean
  financial record can have an unsecured credit
  card. On the other hand, if you are like George
  whos having a bad credit history, a secured
  credit card can be your option with some strings
  attached we're talking here about the required
  deposit. Lets look into it further. 
•  

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How do secured credit cards work?
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• VISIT
• https//www.badcreditresources.com/

A secured credit card for bad credit requires a
collateral deposit before a line of credit is
opened in your name by the lender. Meaning, if
you want to have a credit line of 300, you may
be required to provide the lender with that full
amount. Then, the lender retains the money and
gives you a credit card for that amount of money
you deposited. In times you have defaults or
cannot pay the minimum amount due each month, the
lender can use the deposited money to cover the
bill.  You can use secured credit cards just
like the other credit cards - swipe it on your
purchases up to its credit limit and make sure
you make timely payments each month. This is
designed to help cardholders like George who have
bad credit to rebuild their credit history or to
other individuals who dont have credit history
yet.
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Noting a secured credit card is an actual credit
card, issuers of secured cards may share your
activities such as monthly payments with major
credit bureaus. Paying your dues on time can help
you build your credit history, improve credit
health, and sooner or later upgrade to the
unsecured or no deposit credit card category. 
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Here, we will show you the Pros and Cons of a
secured credit card
Pros Cons
Usually reports to major credit bureaus Qualifies bad or no credit individuals  Security deposits are only used for default payments Stress-free approval You may earn rewards Some do not require credit checks There are secured credit cards that double your deposit   Challenge on coming up with the security deposit Other fees might be applicable like maintenance fees and annual fee Higher interest rate charge You might only have a low credit limit  
Ideally, the process goes like this you pay for
a deposit, use the card, build credit, get your
deposit back, and move to an unsecured card.   
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What is an unsecured credit card?
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In our scenario above, you discovered that Sam
was able to have an unsecured credit card mainly
because of his clean credit history. Credit card
for bad credit unsecured do not require a
security deposit or collateral and are the most
common type of credit card.    This type of
credit card is suitable for people who have an
established credit history and good to excellent
credit score. Except for the no deposit
advantage, Sam will be able to enjoy lower
interest rates based on his creditworthiness, a
wide range of rewards such as cashback, limited
time 0 APR offers, and points or miles for
travel. 
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To help you compare secured and unsecured credit
cards, we will give you the Pros and Cons of an
unsecured credit card
Pros Cons
No upfront deposit Higher credit limit More rewards and bonuses Lower interest rate Few fees   It May be difficult to be approved Credit check required Easier to overspend Can harm your credit scores once payments get a default    
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• Which is better?

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This question can be answered based on your
current credit rating status. Depending on what
you need or desire from a credit card, both
secured and unsecured cards have
advantages.   When you know you are not yet
qualified for an unsecured credit card, you can
spend some time building a good credit history
with the secured cards and remember not to
overspend.   A secured credit card may be the
ideal option for someone who is trying to
establish or restore their credit history,
although it does need an initial deposit and may
not offer many benefits.   An unsecured credit
card, on the other hand, is the type of credit
card you're most likely to see advertised, even
if it doesn't mention "unsecured." These cards
may offer benefits, but they may be more
difficult to qualify for if you don't have a high
credit score. Even if you start with a secured
credit card, paying your debt on time and
maintaining your credit score is still
essential.  
Which is better?