Your credit score depends on how well you manage debt. This means that you must first have debt to have good credit or to build your credit. The easiest way to get credit and create a debt management record (AKA build your credit) is to open up a credit card account.
The right unsecured credit card is the best way to create and/or strengthen your credit score. But before you start searching and applying for various credit cards, let us take some of that work off your hands.
Keep reading to learn what an unsecured credit card is, the benefits of opening an unsecured credit line, and review the top three unsecured credit cards on the market in 2019.
What is an Unsecured Credit Card, Anyway?
Before we tell you about the best unsecured credit cards of 2019, it’s important to know what an unsecured credit card is.
An unsecured credit card is the most common type of credit card on the market. While the word “unsecured” may sound scary, it is actually a positive thing.
When a card is “unsecured,” it means that there is no deposit required to open the line of credit. When someone talks about a credit card, they are more than likely talking about an unsecured card.
An unsecured credit card offers traditional credit options for individuals of all credit types. It is a great option for individuals who want to build their credit, especially those who may have had trouble getting approved for other credit options. The approval requirements are lower but they do come with traditional fees and interest rates.
How is Unsecured Different than Secured?
The biggest difference between a secured and unsecured credit card is the upfront deposit. The deposit for secured cards is essentially a safety net for the bank. It is usually 50% to 100% of the credit limit offered with the card (which means that the total credit limit is often low).
The security deposit of secured cards ensures the credit card company has money to deduct in case your account closes with a remaining balance or you fall behind on your payments.
Some secured credit cards will allow you to convert to an unsecured card after a certain amount of time if you pay your payments on time. This means that they will refund your deposit and you can enjoy the perks of an unsecured credit account.
What are the Benefits of an Unsecured Credit Card?
The benefits of unsecured credit cards are wide-ranging, especially when compared to secured credit cards. Unlike secured cards that require a deposit upfront to open an account, unsecured cards don’t need any money down.
Because there is no security deposit, unsecured cards may have higher interest rates to offset the risk of individuals with poor or fair credit.
Another benefit to unsecured cards is the fact that there are many different types available for different people with different credit scores and histories. Most people can find an unsecured card regardless of their credit score.
Even if you have a little-to-no credit history, you can still get an unsecured credit card with the right the company.
The best part about unsecured credit cards is that they often do not require annual fees.
However, whether your unsecured card comes with no annual fees will depend on your credit score. If your score is low, then you will likely have to pay an annual fee to get an unsecured credit line.
If your credit isn’t awful, unsecured credit cards can offer low interests rates, too. If you have poor credit, then the interest rates with an unsecured card are going to be higher than a secured card.
You will also get higher credit limits with an unsecured card compared to a secured card if you have fair credit. This can be especially beneficial for those who want to use their credit card while travelling (flights can cost over $1,000) or big purchases.
How to Find an Unsecured Credit Card
The first step in finding an unsecured credit card to fit your needs is to check your credit score. There are many websites that allow you to check your credit for free such as Experian, Credit Karma, and Free Credit Report.
Because unsecured credit cards are riskier for the lender (they don’t have a security deposit to fall back on if you default on your payments) the required minimum credit score is typically higher for an unsecured credit card. However, some cards will offer unsecured lines to poor credit holders for a higher annual fee and/or interest rate.
Once you have an idea of what your credit score is, consider your spending habits and what you’ll use your card for the most. This will give you an idea of how much credit you will need.
Next, think about the reason why you want a credit card. Consider the benefits and the perks that you are looking for most.
Are you wanting to rack up some airline miles for your next trip?
Are you hoping to build your credit?
Maybe you’re interested in getting cash back for your purchases to save money in long-run, or you’re in need of a financial safety net when times get tough.
Knowing why you want a credit card is significant in choosing the right unsecured card for you. For example, if you’re going to be a big spender, reap in lots of cash back rewards, or gain a lot of airline miles, paying a higher annual fee may be worth it to enjoy more benefits.
Once you’ve figured this out, you’re ready to use our credit card finder tool.
Our credit card finder tool will help you find the best credit card for your needs as well as your credit score. It allows you to instantly compare the benefits, annual fees, transactions fees, interest rates, credit limit, and more.
The Best Unsecured Credit Cards of 2019
To give you a head start, we’ve compiled the top three best unsecured credit cards of 2019.
1. Best Unsecured Card for Rewards and Credit Building– Credit One Bank® Platinum Visa® with Cash Back Rewards
Whether you have no credit history and are looking to build your credit or you have bad credit and need to rebuild your credit, the Credit One Bank® Platinum Visa® with cash back rewards is the best unsecured credit card for you.
Actually, even if you have great credit, this credit card is still one of the best out there.
For anyone looking to build or rebuild their credit, it can be difficult to get approved for a credit card with rewards. Luckily, with the Credit One Bank® Platinum Visa® you’ve got options. This card provides 1% cash back on all eligible purchases.
The types of purchases that are eligible for cash back will depend on your credit score and history. For example, some cash back reward programs include dining and others don’t.
With this platinum card, there is no fee for applying and you can enjoy $0 in monthly fees.
The annual fees are low, too. You’ll pay between $0 to $75 for the first year.
Most new cardholders with poor credit will begin with a $300 credit line. This amount is perfect for emergency needs such as minor car damage, a tow, or unexpected medical costs.
This card also offers competitive APRs, a mobile app to manage your account, and works with Apple Pay so you can make purchases with your phone.
2. Best Unsecured Card for Fair or Limited Credit with No Annual Fee–Capital One® Platinum Credit Card
The best unsecured card for people with fair or limited credit AND without an annual fee is the Capital One® Platinum credit card. This card is great for those who want their first credit card or who need to build their credit from scratch.
Capital One is able to offer no annual fees because they start with a low credit limit. The credit line can increase after you make your first five monthly payments on time.
This card also doesn’t charge foreign transaction fees or balance transfer fees, making it great for individuals who need to boost their credit without paying for it.
Why is this the best for building credit? Because Capital One submits account reports to three major credit bureaus every month. This means that your credit will stay up-to-date and change quickly.
As long as you pay your bill on time every month and never use your entire credit limit, you can expect to improve your credit in no time.
While the Capital One® Platinum card doesn’t offer cash back rewards or airline miles, it does have other benefits. It provides access to auto rental insurance, travel accident insurance, 24-hour travel and roadside assistance, and price protection for your purchases.
Other perks to this card include the online and mobile banking options, fraud coverage, and zero penalty APR. Be sure to pay your balance off as much as possible because the APR interest rate is higher than other cards.
3. Best Unsecured Card for Anyone–Capital One® QuicksilverOne® Credit Card
The Capital One® QuicksilverOne® credit card is the best unsecured credit card option for anyone who needs a simple credit card without the frills, fees, and expenses. The Capital One® QuicksilverOne® is especially great for those who have average credit and are looking to gain cash back rewards.
This card offers a flat cash back rate at 1.5% for all purchases. There is no variation in the purchases that are eligible and no rotating categories. Plus, you can redeem your cash rewards at any time, there is no limit to how much cash you can earn, and your cash back rewards never expire!
Another great perk of this card is the sign-up bonus.
Capital One will give you money just for signing up for this credit card. After you spend $500, you get $150 back.
What is also great about this card is that your credit limit depends on your credit history but can increase over time. After you make your first five monthly payments on time, you can get an increase in your credit line.
While there is a flat rate annual fee of $39, this is on the lower end for unsecured cards and average credits. It will be well worth it with the cash back rewards and additional benefits this card has to offer.
This card offers $0 fraud liability, a free mobile app to manage your account, no foreign transaction fees, and low cash advance fees.
Like the Capital One® Platinum card, your QuicksilverOne® account gives you access to auto rental insurance, travel assistance, roadside assistance, and travel accident insurance.
Find the Perfect Unsecured Credit Card Today
When it comes to credit cards, the simplest and most common options are unsecured. If you’re ready to start building your credit, fixing your credit, or need some extra financial security without asking for a loan or putting money down, then an unsecured credit card is the way to go.
Choosing the right unsecured credit card means knowing your credit score, your needs, and shopping around. Lucky for you, we do the shopping around for you.
At Bonsai Finance, we have reviewed the biggest credit card options out there so you can know everything there is to know before you apply. Check out our reviews here.
We also have compiled lists of the best credit card based on different needs and credits. Check out lists for best rewards credit cards, travel credit cards, unsecured cards for bad credit, and more.
If you’re ready to apply for an unsecured card, visit our credit card page, find the card you’re looking for, and simply click apply. It’s that easy!
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