Unsecured credit cards

An unsecured credit card is similar to an unsecured personal loan, because all it requires is your signature, without any form of collateral, and there's no money down (no deposit). However, the interest charged by the credit card company is calculated differently and generally at a higher rate, which makes it less attractive than a personal loan from a bank.

Another type of "unsecured card", which really isn't a credit card, is called a merchant card or a catalog card. This card allows you to purchase products from a specific catalog, store, or vender only. If you need an unsecured line of credit only to buy gifts, this type of card can be useful.

The danger with unsecured credit cards is that it can be easy to accrue too much interest debt if you don't pay off balances quickly. However, responsible use of an unsecured credit card is one of the best ways to improve credit scores. If your future plans involve buying a home or car, an unsecured credit card can help you achieve loan approval.

Unsecured credit cards range from no perks to cash back bonuses. Which issuer will approve you will be determined after a review of your credit report. If you have bad credit or bankruptcy, it's not likely you'll get approved for an unsecured credit card. If you don't have perfect or near perfect credit, it's unlikely you'll get approved for a platinum unsecured card. There are other unsecured credit cards between these two ranges.

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