Review and Compare the Best Unsecured Credit Cards

Unsecured Credit Cards Explained and FAQ borrower questions
Unsecured credit cards are one of the most commonly issued types cards in the industry today. These cards can provide consumers with extra purchasing power, and a great deal of convenience overall. If you are considering getting an unsecured credit card, you need to understand exactly how it works first.

Unsecured Credit Card Basics

With an unsecured credit card, you get a line of credit from the issuer. You are not required to put up any collateral in order to get the credit line. In order to get approved for this type of credit card, you will simply need a good credit history and a sufficient amount of income.

In many cases, the credit card company will start you out with a lower credit line, and then increase it over time. If you prove yourself by making regular payments to the credit card company, your credit line may increase.

When you make a purchase on your credit card, you are essentially borrowing money. Then you have to pay the money back to the credit card company. If you pay it back within the month, you will not have to pay any interest on the purchase. If you do not pay the loan back within the first month, the credit card company will start charging you interest based on the total amount of your balance. Each month, a minimum payment amount will be calculated, and you will have to pay at least that much. You can choose to pay more than the minimum payment, and this will help pay down the balance that you owe.

Can the Credit Card Company Do Anything to Me If I Don’t Pay?
Since the credit card company is giving you an unsecured credit card, you do not have to attach any collateral to the amount that you owe. This might encourage some to believe that there is nothing that the credit card company can do to them if they don’t pay their debt back. Unfortunately, this is not true. The credit card company can take several actions against you to get you to pay back the money. The credit card company has the option of filing a lawsuit against you to get a judgment for the debt. At that point, the credit card company could use that judgment to get the money in a few different ways. For example, they could garnish your wages, seize your assets or use some other tactics.

Is it Easy to Get Approved?

In today’s banking industry, it is becoming increasingly more difficult to get approved for an unsecured credit card. In order to get approved for an unsecured card, you have to have a decent credit score. The credit score will be determined by the credit card company that you are working with. Some are a little more lenient than others when it comes to prevent people for unsecured cards.

How is My Credit Line Determined?

The credit line at the credit card company gives you will vary from one case to the next. The line is based on your credit history and your income. Customers who have good credit scores and very high incomes may have extremely high limits. Other customers who have low incomes may get started out with a lower limit.

What Happens if I Miss the Payment Due Date?

If you don’t get your payment to the credit card company by the due date, you will be charged a late fee. In some cases, the interest rate on your card may also increase as a result. If you continue to avoid paying, then the company will take further collection actions.

Updated January 3, 2014 – Your Source for the Best Unsecured and Secured Credit Cards

* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the 'Apply Now' button, you can review the credit card terms and conditions on the issuers website.
Designed for FTC - Visa, Mastercard, CNN Money