Credit cards are such useful tools where you can save money while spending your money. Since you must pay back what you spent, paying credit card balance on time is a crucial thing. If you don’t pay off your balance responsibly, it will definitely hurt your credit score. Not only that but new lenders will be suspicious of you and request documents after a document to determine your creditworthiness.
Given there will always be a check before a lender approves a new credit card, your credit score matters. Learn more about credit scores and how to from here.
Secured Credit Cards
Even if your credit score is very bad, you still can get credit cards. After all, how could you build a credit score again if you can’t open new credit? However, your only option is going to be secured credit cards. This type of credit card works simple. You place a security deposit and you’ll have a new credit line available to you. Usually, it is close to dollar-to-dollar value. So if you were to place $500, your credit line will be about $480 or so.
Without a doubt, secured credit cards is best for those who are beginning to establish their credit scores or trying to recover from bad credit.
Unsecured Credit Cards
On the other hand, unsecured credit cards are—unsecured. The credit card companies do not require a security deposit. To get an unsecured credit card, you generally need to have a relatively good credit score. Although you won’t need to place a security deposit, unless you have a high income, you won’t start off with a high credit line.
As you continue to use your credit card and make payments responsibly, your credit line should be way higher than what you got at first in about six to nine months.
We recommend trying to get an unsecured credit card first since your money won’t be locked. All credit card companies offer both secured credit cards and usually there isn’t a difference between an unsecured credit card and a secured credit card. As for the best unsecured and secured credit cards for those who are trying to build or increase credit, you can read this article to see which one will benefit you the most.