10:33 PM
Gracy Mathew
Secured and the unsecured card are the two prime types of credit cards carrying a brand logo from of the major credit card companies. Many card holders are a bit confused while distinguishing a secured card from an unsecured credit card. Both of these cards have credit limits and also some fees are involved in using them to pay for goods and services but, it is the behind the scene financial activity that determines the difference between a secured and an unsecured credit card.
Secured Credit Cards - Secured credit cards are guaranteed VISA or MasterCard that has been secured by a deposit by that card holder to the issuer's bank. You have to deposit an amount ranging from $300 to $5000 in a low-interest saving account or CD to secure the credit card. Hence the card issuer has a security deposit to cover any unpaid bills and is assured of getting paid.
Unsecured Credit Cards - In case of an unsecured credit card the card holder does not have to deposit any initial amount. This card is issued based on the past financial record of the borrower. Funds are drawn from your "line of credit" when you withdraw cash or make any purchase using this card. You definitely have to pay back the amount you borrowed each month and if you carry over to the next month you will be charged an interest rate. Hence an unsecured credit card is a choice for the individuals with good credit.
So it is up to you to determine which type of credit card will be a better one for you. Depending on your personal budgeting and spending habits you have to make a choice. It is advisable to go for a secured credit card if you are one among the people with credit scores.
Secured Credit Cards - Secured credit cards are guaranteed VISA or MasterCard that has been secured by a deposit by that card holder to the issuer's bank. You have to deposit an amount ranging from $300 to $5000 in a low-interest saving account or CD to secure the credit card. Hence the card issuer has a security deposit to cover any unpaid bills and is assured of getting paid.
Unsecured Credit Cards - In case of an unsecured credit card the card holder does not have to deposit any initial amount. This card is issued based on the past financial record of the borrower. Funds are drawn from your "line of credit" when you withdraw cash or make any purchase using this card. You definitely have to pay back the amount you borrowed each month and if you carry over to the next month you will be charged an interest rate. Hence an unsecured credit card is a choice for the individuals with good credit.
So it is up to you to determine which type of credit card will be a better one for you. Depending on your personal budgeting and spending habits you have to make a choice. It is advisable to go for a secured credit card if you are one among the people with credit scores.
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