Have you ever tried to apply for a credit card to a bank? The requirements that need to be fulfilled like a stable job, minimum amount of wage, and other complicated processes are deemed to be the most troublesome during a credit card application. However, there is a solution. This article on the difference between secured and unsecured credit card will give you some knowledge about secured credit card and why you should get one.
After waiting for the approval of your credit card application, it usually ends with disappointment because the bank decides that you are not eligible for the credit card. Rather than getting annoyed at this fact, learn the difference between secured and unsecured credit card for an alternative solution. The main function of the secured credit card is basically the same as a regular credit card, which is to delay payments.
Here Are the Difference between Secured and Unsecured Credit Card
The difference in requirements between secured and unsecured credit card is the most prominent. The basic requirement is having a minimum age of twenty-one, and no profession is off the limits. Everyone is eligible for a secured credit card, including those who are still in college or are no longer within the productive age.
There is no minimum wage requirement like the one found in regular credit card requirement. But in order to receive a secured credit card, a bank account is needed as a guarantee. Interestingly, the account used as guarantee also bears interest so when you stop using the credit card, there will be some amount of interest received.
The next difference between secured and unsecured credit card is the existence of a grace period. A full payment of the debts has to be made every month. But the secured credit card gives a grace period for customers until the due date. This is a requirement to enjoy the promotions offered by the credit card, such as 0% installment or cashback.
You can decide your own limit in a secured credit card. This unsecured credit card difference is also what sets it apart from regular credit cards, which have limits set by the bank. What has to be kept in mind is the limit cannot exceed the amount in the guaranteed bank account. If this is the first time owning a credit card, it is better not to set a limit that is too high. Overusing the credit card when the limit is too high will result in inability to pay it off in the future. Always estimate the spending thoroughly before setting a credit card limit.
Learning about the difference between secured and unsecured credit card will hopefully give you some illustration of how this credit card works. No matter which credit card provider you choose, it should always be remembered to use credit cards wisely. Having a bank account as a guarantee does not mean the credit card can be used as much as possible, because it is a pledge of your own money.