Choosing the Right Credit Card Offer: Secured or Unsecured

A Credit Article Contributed by Kris Griebe

How Do I Know If I Want to Accept an Offer for a Secured, or Unsecured, Credit Card?

Before you decide to accept any credit card offer, you need to understand the difference between a secured credit card, and an unsecured credit card. While they may sound similar, these types of credit cards represent the opposite sides of the spectrum.

A secured credit card is one which requires you to place a deposit, or down payment, before use. If you are awarded a secured credit card with a $500.00 limit, you will have to start paying on your limit before you can use it. You can choose to deposit the full amount when you receive the credit card, or you can pay small monthly payments towards your limit. No matter which you do, you will not be able to spend more than you have deposited. For example, if you paid $30.00 towards your credit card in the first month, you will then have $30.00 available to spend. You cannot exceed that limit.

An unsecured credit card is one which does not require a deposit or down payment. These credit cards typically have higher limits, and often times lower interest rates as well. With an unsecured credit card, the moment it is in your hands you can spend up to your credit limit. If your card has a $5000.00 credit limit, the day you receive it you could spend all $5000.00 (though that is NOT recommended! ).

Each Offer Sounds Great, but Which Credit Card is for Me?

If you have problems managing your credit card debt, you should probably go with a secured credit card. Why? There are a few reasons that are vitally important if you wish to maintain your good credit. First off, a secured credit card will not allow you to spend as much money, in fact, you will only be able to spend as much as you have deposited on it. This means that it is almost like spending cash from your own pocket.

The difference is, when you pay your bill on time, a positive remark will be added to your credit score. Second, having a deposit prevents you from defaulting on your payment. Thus, even if some catastrophic event takes place, your credit card will be paid off by your deposit.

Unsecured credit cards will offer you greater flexibility. You will have a higher limit, and be able to spend money immediately. You should only accept an unsecured credit card offer if you know you can manage your debt wisely, and make your payments promptly.

Now That I Have Chosen a Credit Card, Where Can I Find an Offer?

Look in your mailbox first. Often, credit card companies will mail credit card offers directly to you.

If you have not received credit card offers by mail, you can also look online. Go to a search engine web site, such as Lycos or Google, and type "unsecured credit card" in the little text box. Hit the "search" button and in a few seconds (or possibly less) you will have a list of sites that you can browse to find the credit card offer best suited to your needs!