Making bad credit decision now can cost you big time in the long run. Some credit cards require you to hold money as collateral in an account in order to use the card. These cards are secured credit cards. On the other hand, unsecured credit cards are those that do not require any security deposit. These cards are designed for people with decent credit score and many unsecured credit cards offer attractive rewards programs. These are the regular credit cards. There is no need to hold a certain amount in order to cover costs if you are not paying the balance. If you have an unsecured credit card, you are assumed to have a history that indicates that you are able to manage your credits with responsibility. An unsecured credit card is weighed better in the credit scoring formula than a secured credit card. This means that you have a slightly higher score if you have an unsecured card than if you have a secured credit card. But even if you have a secured credit card, it is possible for you to switch to an unsecured credit card. After six months to a year, your issuer might be willing to switch your secured card to an unsecured credit card – as long as you show some improvement in your credit record. Even if your secured card is not converted to an unsecured card, you can apply for an unsecured card. If you have managed your all accounts responsibly by paying all the bills in full and on time each month, your credit score might have improved to the point that you will be approved for an unsecured credit card.
Rewards, retail and low interest cards are typically unsecured, and they offer benefits such as cash back, travel points, discounts on selected stores and interest free introductory period. Since they are less likely to pay off their debt, it is difficult for people with bad credit to qualify for secured card. There are a few unsecured credit cards that have an easy procedure to qualify for, but they have high annual fees which will be deducted from your credit limit.