No Credit? Looking for an Unsecured Credit Card? No Problem!

credit-cards_largeIn the tough economic crisis, a lot of people pass through a difficult phase in their lives. There are times when you look for unsecured credit cards for people with no credit history. However, you need to be careful. You shouldn’t just get excited and grab any card. Here are some things you need to consider.

Brief Overview of Unsecured Credit Cards 

In simple terms, an unsecured credit card is just like other credit cards. However, there’s a difference. You don’t have to put any deposits or collateral security like secured credit cards. It’s important to understand that nothing comes for free. If you want to use unsecured credit cards for people with no credit history, you will have to pay a higher rate of interest.

Apply for an Unsecured Credit Card 

It’s quite easy to apply for an unsecured credit card. In fact, you can easily apply it online. The company will just ask your personal information, including name, contact number, address, social security number, age, credit history, details of pending loans and more.

Factors to Consider 

When you look for an unsecured credit card on the Internet, you should make sure you’re choosing an authentic company. There are many dummy companies who may try to lure you in with exciting offers. However, these companies may misuse the personal information you provide, including your social security number.

Thus, before applying for an online unsecured credit card, you should choose a reputed company. It’s important to conduct an extensive research, and gather more information about the company.

Another important thing to consider is the annual fees and interest rates. As mentioned earlier, annual fee and interest rates can be quite high for an unsecured credit card. Therefore, before you apply, it’s important to compare the fees and rates offered by various companies.

While choosing a company, you should read the fine print on the contract. You should also ask about any penalties or fines when you miss a payment. Penalties can make your interest rates get higher. Most importantly, you should look for introductory prices and other such promotions.

Make Your Good Credit a Habit 

A good credit habit allows you to make every repayment made through your credit card in the same month. With a good credit habit, you’re able to save a lot of money on your interest rates. Moreover, you will also be able to improve your credit score. When you practice a good credit habit consistently for some time, you will be able to apply for car and home loans. You will be more likely to get approved.

Try to be Realistic 

If you don’t have credit, it won’t be the end of the road. However, it can still limit your options. It’s important to understand this concept. You need to be realistic, and look for companies offering unsecured credit cards for people with no credit history. It’s important to understand that you won’t be able to get an elite credit card. You just need to work on building your credit portfolio, and make sure you avoid future late or missed payments.

Starter Credit Cards For People with No Credit

credit-cardsSuppose your credit history is weak and you want to try for a credit card. With some research you will find out about the many difficulties. You will have to hold on real tight as there is going to be a flurry of ridiculous and unbelievable offers coming your way. This is where the age old adage of when it sounds too good to be true, it just might be that, comes into play. It is important to look out for several details that will help steer clear of credit card scams and misleading offers.

Before looking around, you should get to know your present credit score. There are websites online that you can access and they will charge you a nominal retainer fee. The fee is valid for a certain period and some companies allow you a free trial within a certain period.

During your quest for starter credit cards please keep your eyes wide open. Be on the lookout for outrageous claims and superfluous advertising. Always go through the fine print in all the material that they supply you with. It is advisable to rely on your judgment before going ahead. While it is all rosy at the onset, later on you could find yourself standing in murky waters of hidden charges and fees, high rate of interest and even fraudulent practices.

You should know that getting a credit card with an APR below 15% is improbable. It will be tougher to qualify for a rewards card. You should start by trying to build on your credit history, by creating highly responsible spending habits for yourself. Once things settle, it becomes possible to take up a credit card offering better interest rates and usage rewards.

Approach the local credit union for help. These unions are going to be able to accept your application no matter what. Another fact that you might appreciate is that the federal credit unions are not in a position to charge interest rate above 18% even with missed payments. This is great but you should not make it a routine to miss payments.

It is important to weigh a highly important question that you will be faced with, when applying. The question is whether taking up a high fee card at a low interest rate going to work for you? Or would it be better to take up one with low fees attached but at a high interest rate. More often than not the public tends to go with the low fee option but the high interest rate will make up for it. If you are carrying a balance then it is important that you examine the proper cost of each of your cards. This can be done by considering the recurring fees and also the ongoing APR. If the proposed APR is 30% then simply turn away. The Credit Card Act (2009) clearly mentions that the total fees in the 1st year should never exceed 25% of the user’s credit limit. Beware of over enthusiastic companies as there will be many welcoming you. The many interesting deals that come your way through them, could only push you further down the river of debt.

When your credit rating is poor, look for a secured credit card. Make your payments on time, never miss even a single one, be very smart, earn credibility for yourself and then eventually graduate to the next level of credit cards for yourself.

Credit Cards for People with No Credit – Some Easy Ways Out

cropped-creditcards.jpgMost banks, financial institutions and money lenders hardly offer any leverage to people with bad or no credit. In case you do not have any credit, you must be wondering how to get a credit card. In the initial stages of correspondence, financial institutions and banks may show reluctance. However, there are still credit cards for people with no credit. In this post, we have discussed some ways in which you can get a credit card even if you do not have credit.

Choose a Collateral or Secured Card – In this situation, you need to open a new savings bank account in a bank. You will have to deposit a specific amount in the account. This amount is your standard credit limit. The account will act as collateral. Therefore, if you do not pay the credit card bills, the bank will deduct this amount from your savings account.

Get a Prepaid Card – Such a card works like a standard debit card. If you do not have credit because of bankruptcy, foreclosure, late payments or bad history, a prepaid card can be a good choice. Before you get the card, you will have to make an advance payment as per the amount of money you want to spend. Your purchases will be charged against this specific amount.

Small Retail Store Card – If you do not have credit, it is likely that you will have to approach a small retail store to get a credit card. It is worth mentioning that small store credit cards come with higher interest rates. However, these cards can be easily obtained, and even give you a good credit score. It is very important to pay the bills on time. Moreover, you should not send applications to a lot of stores. In the long run, this can affect your credit score.

Find a Co-Signee – This can be another great option to find a credit card for people with no credit. You can easily persuade a friend or family member with a stable and good credit history to become a co-signee. If you can’t pay the bills, the specific amount of the bill will be transferred to the consignee.

Always Choose a Familiar Bank – It is one of the best ways to get a credit card without any credit. If you’re already familiar with a bank or financial institution, you should approach this lender. Most banks aren’t willing to give up on their customers. Therefore, your bank will be able to come up with an appropriate solution.

Each option in the above mentioned list offers numerous benefits to people who don’t have credit. With these options, you will be able to set a good credit score. It will help you in future financial transactions. It’s important to understand that the money lender may consider some other parameters, such as steady job, permanent residency, debt to income ratio and so on. These parameters can play a positive role when you’re looking for credit cards for people with no credit. Just make sure you research all the options before you take any step.

Important Facts about Credit Cards for People with No Credit or Bad Credit

ccA few years ago, people having poor or no credit had their hands tied when it came to accessing credit cards. Trying to seek the services from a financial institution such as a bank was always futile. However, this has been changing overtime. As a matter of fact, people with very low scores or those who haven’t built any credit can access credit cards. Nonetheless, before approaching a provider, you should be aware of the following facts:

Higher Interest Rates

While or before applying for your credit card, you should be aware that the financial institution will charge you rates that are much higher than the market. This is a precautionary step just in case you default. A low credit score makes you appear like a risk to them. The high interests will apply when you make purchases as well as cash advances. Shopping around for the best rates is always advised.

Low Credit Limits

Usually, the normal credit cards come with a good line limit. This is usually based on source of income and credit score. In fact, due to the competition in the market, the providers are always willing to increase the limits just to suit you. Unfortunately, such options are not available for people with poor or no credit. As a matter of fact, you are more likely to be offered a very low credit limit.

No Perks

Of late, the competition amongst credit card providers has increased. They will constantly advertise their services just to get that extra customer. They will use several incentives to attract a potential client. The most common are: airline/ frequent flyer miles, cash back, shopping rewards, hotel rewards, gifts and much more. Unfortunately such perks may not feature in the credit cards for people with bad credit.

Additional Charges

Besides the low credit limits and higher rates of interests, credit cards for people with no credit or poor credit may also attract other charges. They apply the charges to minimize the risk or liability of offering you the service. Common charges include application fee, annual fee, monthly fee and more. Since the extra charges are not standard, you may be lucky to come across a credit card that only has minimal fees.

Secured Card

Credit cards come as unsecured or secured. Unsecured do not require you depositing any money. Secured credit cards require a prospective borrower to deposit an amount of money as security. The credit line will be based on the value deposited. The credit card will operate like the normal debit card. A borrower is therefore not allowed to go beyond the deposited amount.

Credit cards for people with no credit or bad credit brought relief for many people. Finally, they could access credit and make purchases even when they were in the “red.” This ensured they could live a more comfortable life. However, the credit card should be used in building or re-building the credit score rather than splashing money around. A good plan is to make timely payments and ensuring you do not exceed 30% of the limit.