By: John Kiernan, Personal Finance Editor
Whether or not you should apply for an unsecured credit card depends on your credit standing:
Damaged Credit: If you have damaged credit, your focus should really be on rebuilding your credit standing. Aside from the fact that
unsecured credit cards for bad credit might not even be available, secured cards are much better suited to accomplishing this objective for three reasons: 1) They are much easier to get approved for, since they require a security deposit; 2) The security deposit makes high fees unnecessary and secured cards thereby cheaper alternatives; 3)The fact that the security deposit equals your credit line makes it impossible to spend beyond your means.
Limited Credit: From a credit card company’s perspective, people with limited or no credit history can be put into one of two groups: students and everyone else. The focus of anyone with limited or no credit should be building credit as inexpensively as possible. With this in mind, whether the card is secured or unsecured doesn’t really matter and college students should focus their search on no annual fee student cards, while everyone else should check out all of the no annual fee credit cards for limited credit.
Good or Excellent Credit: Pretty much anyone in this category should opt for an unsecured credit card, given that the rewards, interest rates and lines of credit simply cannot be matched by secured cards.
