One in 10 Americans currently has what is considered to be bad credit; a score of less than 579. For the millions of people wrestling with their credit score, getting the credit you need extended to you at fair rates can be a challenge. This is particularly true if you don’t have anything you can use as collateral. Thankfully, it is possible to find unsecured credit cards for bad credit from reputable lenders eager to work with you. Learning more about how they work, why they are different from secured ones, and what you should look for when selecting a lender is the best way to ensure that you wind up with a card that suits your needs.
What to Look for in an Unsecured Card
There are a few factors you should keep in mind when searching for unsecured cards, even if you have bad credit:
- APR. APR, or annual percentage rate, is incredibly important. This is the rate at which your current balance is accumulating interest. Your APR comes into play if you are carrying a balance from month to month. Even if you plan on paying off your balance in full every month, you should still pay attention to this rate, just in case an emergency arises, and you can only make your minimum monthly payment.
- Annual Fees. Some cards, both secured and unsecured, come with annual fees. While you may want to avoid them, they aren’t always a bad thing. In some cases, these extra fees give you access to special perks and rewards, while in others they may mean lower interest rates.
- Rewards. Unsecured cards may come with a rewards program. These programs may give you cash back for using the card. The amount is typically a percentage of what you have spent in the past month. Other cards offer loyalty programs, where you can get discounts off of goods and services offered by partner companies.
If you are using your new unsecured credit card to amalgamate your debt, make sure that the one you opt for allows for balance transfers. Pay attention to any fees or special interest rates that apply, as these may differ from those associated with regular transactions.
How to Find Unsecured Credit Cards for Bad Credit
While you can spend time searching the internet for unsecured cards for bad credit, there are easier ways. Going to an agency like Bonsai Finance gives you access to a ton of lenders, increasing the chance that you are going to find the perfect card for your needs. When you search on your own, you are more likely to settle. At Bonsai Finance, you can apply for your unsecured card online, regardless of credit level. Our agents then review your application and get to work finding you a lender who is eager to extend you the credit you need.
Using Your Unsecured Card to Rebuild Credit
Responsible use of your new unsecured card is the best way to quickly rebuild or establish credit. Remember to make your minimum monthly payments on time, every month. One way to be sure you never miss a minimum payment is to have your bills sent to you by electronic mail and then add them to your calendar or task list. This helps you avoid steep penalties and late fees. You should also avoid putting anything on the card you do not think you can pay off within a reasonable time frame.
For millions of Americans, unsecured credit cards for bad credit can give them the freedom they need. These cards allow you to make online purchases, buy everyday items you need, and to keep money set aside for emergency situations without financial stress.