If you are struggling to make ends meet, or you are looking for a financial safety net but you have bad credit, you might feel like there is no where to turn. However, there are bad credit unsecured credit cards that can help. What is an unsecured credit card for bad credit? It’s actually the most common type of credit card. It is a card that doesn’t require any type of deposit or collateral.
You might be surprised to hear that you can get bad credit unsecured credit cards, but it’s true. There are many lenders and banks that offer these cards, and they come with several benefits. What are these benefits? Keep reading.
Bad Credit Unsecured Credit Cards Can Be a Financial Safety Net
One of the biggest benefits of unsecured credit cards is that they can give you a financial safety net that you can use if needed. Surprises like a broken water heater happen all of the time, but millions of people don’t have the extra cash that is necessary to fix it. An unsecured credit card can help to pay for it though. Then, you simply make payments to the lender to pay it off.
Unsecured Credit Cards Don’t Require Collateral
Another big benefit of unsecured credit cards is that they do not require collateral. Some credit cards, which are called secured credit cards, do require some type of collateral or deposit. Generally, these are the only option for people with bad credit. However, there are certainly unsecured credit cards out there, too, that people with bad credit can request and get.
You might be wondering what the catch is. After all, you have bad credit but you can use a credit card. It’s not really a catch, but your APR, or the interest you pay on your credit card, is higher for those who have bad credit. So, if a person with great credit and a person with bad credit buy the exact same thing on a credit card, the one with poor credit pays more over time than the one with good credit. The nice thing is, however, is this: the higher your credit score goes, the lower your APR can go.
You Can Improve Your Credit Score With Unsecured Credit Cards
An unsecured credit card with a low limit can certainly help you to improve your credit score, too. Of course, to make this happen, you must make sure to pay on time. Your payment history is reported to the credit bureaus, and over time, you should see your credit score rise.
Keep in mind, if you need cash now, an unsecured credit card probably isn’t the best option. Instead, you should consider an online loan. With an online loan, you don’t need good credit, and you can get the cash you need, immediately.