According to a survey published in the Financial Post, the number of people who are $200 or less away from financial insolvency is on the rise. As a matter of fact, having bad credit has become commonplace. Although having bad credit is not a life sentence, it severely limits your options when you want to access credit. In line with this, credit cards are the most common form of borrowing in Canada with many financial institutions offering a variety of cards targeting different market segments. As more people look for lenient ways of accessing credit, unsecured credit cards for bad credit Canada seem to be the most popular option particularly for people with bad credit. This is because they typically offer lower interest rates and annual fees among other benefits.
Before you go ahead and apply for your next credit card, it is important to evaluate whether it is right for you. Below are some few pointers to help you.
What is an Unsecured Credit Card?
An unsecured credit card is what you typically think about when you are considering taking a credit card. In definition, it is a credit card that is not secured by collateral. The implication is that it does not require a cash deposit to open an account. Most credit cards available in Canada are unsecured. However, they differ in interest rates, reward programs and repayment terms. The fact that you do not need collateral coupled with other benefits make unsecured credit cards the popular options among many Canadians.
Whether you have a good credit score or are aiming to improve it, you can apply and be approved. This is because approval is ultimately decided by the card issuer based on a variety of factors including your credit score. However, some issuers take a broader look, not limited to the credit score, and evaluate your ability to pay off your purchases in time. For this reason, there are unsecured credit cards for people with bad credit. On top of that, many unsecured credit cards can help you build or improve your credit standing. All you have to do is ensure that you pay off your purchases within due deadlines.
Why are Unsecured Credit Cards so Popular?
In comparison to secured credit cards, most Canadians prefer unsecured credit cards as they offer lower interest rates and annual fees in comparison to secured cards. Additionally, most unsecured credit cards in Canada have great rewards programs. A customer earns rewards points every time they make a purchase using the card. Over time, customers can use these points to purchase gift cards, hotel stays, airline tickets and much more. Other programs even offer cashback as a percentage of purchases. In general, unsecured credit cards offer most Canadians, particularly those with bad credit, a convenient way to pay for goods and services even when they don’t have cash-on-hand.
What are the Benefits of Unsecured Credit Cards for Bad Credit Canada?
- They do not require collateral in the form of a cash deposit
- They offer lower interest rates than secured credit cards
- Usually have reward programs
- May build or improve your credit standing
- Lower annual fee
- Often have higher credit limits than secured cards
Unsecured credit cards offer so many benefits, particularly to people with bad credit. If you use it well, it can help you rebuild your credit standing and finally be in charge of your finances.
How to Find the Right Issuer
If you are looking for unsecured credit cards for bad credit Canada, you can simply type into a search engine are looking for a suitable lender from the search results. However, it is not that straightforward. This is because there is so much information on the internet and you might end up making the wrong judgement.
Let Bonsai Finance help you find the perfect unsecured credit card suitable for your situation. At Bonsai Finance, we apply our technical and hand-on experience dealing with financial institutions in evaluating different financial solutions to help you locate the right solutions for you. Our staff will guide you through the whole process and set you up on the path to a more secure financial future. Talk to us today for more information or if you have any questions about unsecured credit cards for bad credit Canada.