These days, many people in the UK are facing financial difficulties to make a living. In order to manage their personal finance, people borrow funds through banks and other lending institutions. In the process, they pile up huge debts on their heads. Unluckily, many people fail to pay their bills and dues on time. All these things contribute to poor credit. However, many banks and credit card companies turn down applications for credit cards if you have poor credit history. In such a scenario, it becomes almost difficult to get approved for a credit card to enjoy credit facilities. Even so, you may enjoy credit through unsecured credit cards if you act diligently just like you do to claim tax back on mileage.
Basics of unsecured cards
Unsecured cards come as a boon to folks with bad credit. However, a bad credit certainly has a negative impact on your credit card application. You may have to make certain compromises while applying for a credit card. Thankfully, compromises that you have to make while applying for these cards are not very extreme. In reality, they are pretty reasonable.
Since you have poor credit, you will have to bear a high rate of interest on the use of unsecured credit cards for cash advances and purchases. This turns out to be the best option for card issuers to recoup their investment. However, you can certainly seek a low rate of interest by communicating with the card company while applying for unsecured cards. There are certain terms and conditions you may have to follow in order to enjoy a fair and reasonable rate of interest. Generally, you will have to keep your spending limit low as prescribed.
You can also enjoy affordable rates of interest by using non-secured cards in a prudent manner. For example, maintaining a disciplined spending habit is a great way to enjoy higher spending limits and low interest rates. Set a low spending threshold limit of 40 to 50 percent in the beginning. In this way, you can enhance your credit to a certain extent. Similarly, it will also ensure that you are making timely repayments. This in turn will help you to enjoy higher spending limits with affordable interest rates, and you can always access funds for an emergency in times of need.
Besides your spending habits and the rate of interest, go through the terms and conditions of the card issuer. It is not a wise idea to accept the conditions blindly just because you are allowed unsecured cards. Instead, take time and read the fine print carefully many card companies add a series of unnecessary additional fees. Balance transfer fees, annual fees, additional monthly fees etc are some of the things to consider before signing the agreement. If you think that the card issuer is charging more than necessary, ask for relevant changes in the terms. In case the card issuer makes suitable changes, then go for it otherwise, switch to the other company.
All these considerations will ensure that you are not being ripped off financially while using unsecured cards. Moreover, it will also make sure that you will enjoy unsecured credit cards in an affordable manner. So, be wise and informed while applying for non-secured cards just like you do claim tax back on mileage.