Newlyweds and the Unsecured Credit Card Temptation
A Credit Article Contributed by Cathy Wilson
Unsecured Credit Cards and the Single College Student
Congratulations! You just got married and you're driving off to your honeymoon and the last thing you are thinking about is unsecured credit cards. Chances are your family has given you a tidy sum for the happy celebration, but it won't be long till you feel you need yourselves a nice credit card, preferably an unsecured credit card. Trouble is, neither of you has much of a credit history... AND you're home from the trip fresh out of cash. What you need is a nice fresh little unsecured credit card... a friendly not-too-high credit line... and of course some way to pay the balance.
Unsecured Credit 101 for the Joyful Newlyweds in Your New Apartment
What exactly IS an unsecured credit card, anyway?
Well, if you've been young and poor for very long, you've probably tried applying for a credit card as a single or maybe as a couple. If you have really bad credit (like you've missed a car payment or run up bills on another card), you may be asked to put some of your own hard-earned money into an account before you can get a card; that is a secured credit card.
The Main Difference between Secured Credit Cards and Unsecured Credit Cards is That You Put Money into an Account Toward the Secured Card.
It is a decent way to build credit. But an unsecured credit card is just a plain old credit card. Often it won't have a very high credit line on it, maybe as low as $500 available.
Why an Unsecured Credit Card If the Available Credit is So Low?
You do this so you guys can build good credit and here is how: you get this unsecured credit card and then YOU PAY OFF THE BALANCE EVERY MONTH. No arguments, excuses, no crying, no fuss. Take it out; put it in.
It's easy! It's the easiest way in the world to build yourselves, as a new couple, some great credit. After all, you don't want to start your marriage in a deep hole of debt. With your unsecured credit card, you can charge a few things, pay the bill in full every month, and build up good credit. THAT's why you want an unsecured credit card.
Unsecured Credit Cards in the long Run
What you are really after is the ability to pay your way without running yourselves into the ground in debt. But you can use an unsecured credit card to help your new family through the thin times till you've got money. For example, it's the first of the month and you've both got a couple of semesters left in school. You've already used up your wedding money for a down on the apartment and part of your books.
Just use your brand-spanking-new credit card to help with tuition -- get the rest of your books -- get a few supplies -- have something nice for dinner together. THEN when your Pell grant comes in, pay that balance right off.
Unsecured Credit Cards As "Insurance"
And don't run up any more credit card bills until you are absolutely sure you can pay 'em off. Use that unsecured credit card for incidentals but only when you know the power of your combined paychecks will take care of it.
Pitfalls of the Unsecured Credit Card
You've got to realize that newlyweds are some of the worst for getting themselves into debt they can't repay. It's a nasty way of starting your life together. Be smart. Think of your unsecured credit card as a tool to build good credit, not a tomorrow-will-never-come free-spending spree bonanza.
