On Choosing An Unsecured Credit Card?

Answer 1

The unsecured credit card is the default when people think of credit cards; it is the credit card that allows the user to purchase goods and services based on only the promise of said user to repay the cost of said goods and services.

The unsecured credit card, once generally considered a necessary tool of adult life in developed nations, has recently come under scrutiny in light of the recent recession and economic market meltdown. Many of the major credit card companies which issued unsecured credit cards were brought to task by governmental agencies for charging their users exorbitant fees, and undertaking various methods to hide their true cost from consumers.

Some of the changes made involved putting limitations on the ways that credit card companies advertised their unsecured credit cards, the fees that such a card could charge, and new limits on who could receive and use an unsecured line of credit. Even in the wake of these recent reforms, credit card companies continue business as usual, from sending out unsolicited cards in the mail to forcing some credit card holders into bankruptcy to pay back overdue debts.

The government is urging those who are considering a line of credit from an unsecured credit card to consider the following points:

1. An unsecured credit card is not needed in order to build credit. Credit may be built from secured credit cards, the prepaid credit card, paying rent, and even from holding down a job for a number of years.

2. A secured credit card offers the same spending power as an unsecured credit card with the limitation that the borrower can not go past a certain limit nor will his assets be responsible for covering a debt past the assets that are being used to cover the monies spent. It is considered a much safer way to borrow money, especially for those just beginning to use credit.

3. When deciding to use an unsecured credit card, make sure to check your credit reports monthly and monitor them for any activity which is not yours.

4. Safe limits for spending on an unsecured credit card are generally accepted as 30% of the total credit issued. Users of unsecured credit cards are also advised not to spend more money than is possible to repay within a given cycle, and to pay back all unsecured credit funds in full at the end of each cycle (usually monthly).

5. An unsecured credit card should never be given to a minor, especially from an unsolicited promotion. If you wish to be removed from solicitation lists, simply call the credit card company which issued the unsolicited material. They are under legislative order to cease and desist unsolicited communication upon the first complaint.