How To Choose The Best Unsecured Credit Card

An unsecured credit card is a credit card that is not secured by any type of money or deposit with the issuing bank. It is generally the best type of credit card to have, but requires a good credit score to obtain.

The market of unsecured credit cards is vast - there are literally thousands of cards to choose from. To find the best one for your situation, it is best to read the fine print on offers that you might receive via mail, or on websites that you visit.

No Annual Fee Or Account Fee

Look for an unsecured credit card that features no annual fee. Some cards may charge an annual fee - as much as $150 dollars a year (some may charge even more); the annual fee is charged to your card automatically, usually at signup, and then once again every year as long as you have the card. This type of card may have other great features that lure you into thinking that you are getting a great deal - but when you factor in this huge annual charge - the card may be turn out to cost more than others that may even have a higher interest rate.

Some unsecured credit cards may charge you a monthly fee called an account maintenance fee. If you are diligent in your card search, there are many unsecured credit cards out there that do not charge this fee, which will add to your savings when you pay your statement each month.

Zero Interest

Be cautious of unsecured credit cards that offer "0%" interest rates. There is usually an expensive, yet hidden, catch to these types of offers. The zero percent usually just applies for the first few months (typically six months), at which time the interest rate may soar to as much as 20%. Should you be late on a payment, this type of offer may specify that the interest rate will convert to the "default" interest rate - which can be even higher. This can cost you a lot of money.

Cash Back

An unsecured credit card that offers 'cash back rewards' sounds very tempting, but may be misleading. These types of rewards often take years to earn - a typical card may pay you around $20 cash back after you have spent more than five thousand, for instance. This type of "slamming" when it comes to unsecured credit card offers is very prevalent, and thus necessitates the further reading of all the small type and print on your terms and conditions.

The best type of unsecured credit card is one that features no annual fee, no monthly account maintenance fee, a reasonable annual percentage rate, and legitimate cash rewards or airline miles that stack up fast. You should also consider whether or not the unsecured credit card that you chose offers you the option to pay zero percent interest on balances that are paid in full within ten days of the end of each billing cycle. This means that if you do not carry a balance, you pay no more for the purchases on the card than you would if you had paid in cash.

Also, if you have balances on other cards, look for an unsecured credit card that offers the option to transfer those balances to your new card; this may not only streamline the number of payments you make each month, but also can save you money if you get a better rate on your new unsecured credit card.