Which Credit Card can I get?

The three major credit cards that people use today are Visa, MasterCard, and American Express. There are others like Capital One, Bank America, and Discover, to mention a few. If you have excellent credit, it is not hard to obtain a credit card but it becomes more difficult when your credit is bad. What your credit is will decide which type of credit card you might be eligible for. The credit card could be secured or unsecured. Let us do credit cards comparison and see which one is best.

Secured credit card

A deposit owned by the credit card company secures this type of credit card. The cardholder must deposit 100% to 200% of the total amount of credit that they ask for. Sometimes the credit card company will offer incentives even on these cards. Some of the incentives that might be offered is the deposit the credit card company may be significantly less than the required credit limit or the deposit could be as little as 10%. When the credit company receives the deposit, it is held in a special account. The cardholder is still required to make regular payments as you would with a regular credit card. If a payment is in default, the credit card company has the option of taking it out of the deposit. The one advantage to having a secured credit card is that the credit card company reports regularly to the credit bureaus, which allows for building a good credit history.

Unsecured credit card

This credit card is not tied to any type of savings account. The majority of people have at least one unsecured credit card. This is like a pre-approved loan in which a person can spend money up to the credit limit the credit company gives the cardholder. The level of credit is based on your credit history. When it is time to make a payment, the balance can be paid in one lump sum or you can make small monthly payments. With an unsecured credit card, there will be interest applied to the balance of the loan each month. In addition, there may be a fee if the cardholder goes over the established credit limit. If there are several late payments, the interest rate may increase. These types of cards are offered to people with good or average credit. When you are approved for the credit card, you will have to pay an initial application fee, an annual fee, one time processing fee, and monthly processing fee. When you are looking for a credit card, you should check out your credit report to correct any mistakes.

Now that you know the two types of credit cards, it is time to make credit cards comparison to see which credit card you should apply for. If you have bad credit, a secured credit is the one you need to apply for in order to build your credit up. People with good or average credit can apply for either one, but the choice most would take is an unsecured credit card.