Unsecured Visa credit cards involve revolving lines of credit that feature interest charges for balances that are not paid off every month. With so many secured credit cards available in present day, many consumers are confused about the difference between unsecured and secured credit cards.
Unsecured vs Secured
What is the difference between unsecured Visa cards and secured Visa cards? While both appear to be identical to the merchants accepting the cards for payment, the difference between the two is where the available balance comes from.
Unsecured credit cards feature revolving balances, meaning the amount available for use decreases as charges are made and then increases back up as payments are made on the balance. These cards are referred to as unsecured because there is nothing beyond the cardholder's signature securing the revolving loan offered by the credit card. On the other hand, secured credit cards are backed by some form of collateral provided by the cardholder. Collateral for secured cards is typically in the form of a savings account of certificate of deposit (CD) that the cardholder cannot access as long as the secured credit card account remains open and active.
Secured cards can be a good choice for people trying to establish or reestablish their credit history, but people looking to obtain credit cards without needing to place funds on hold should apply for unsecured cards.
Find Unsecured Visa Credit Cards
The vast number of unsecured Visa credit cards available is quite impressive. Most of the Visa cards you encounter advertised online and elsewhere, as well as the preapproved credit card applications you receive in the mail, are for unsecured cards. Visa credit cards that are unsecured come with a wide variety of credit lines, interest rates, features and affiliations.
Figuring out which card is right for you may seem like a daunting task, particularly since there are so many cards to choose from. Before settling on one Visa unsecured card over another, ask yourself these questions:
- Which card offers the best interest rate with the lowest fees? Don't merely glance at the interest rate offered by a particular card, but instead look at the entire Terms and Conditions of the card to make sure you are not signing up for a card that will wind up costing you a great deal of money in fees.
- Which card will provide the credit limit you are looking for? While some Visa cards feature relatively small credit limits, others give larger credit limits to creditworthy applicants.
- Are there any rewards featured with the card, and if so, how difficult is to navigate the rewards redemption process? Visa reward cards provide points for purchases that can be redeemed for cash, travel, merchandise and more. Reward cards typically feature higher interest rates and annual fees, however, so make sure the benefits of the reward card outweigh the extra money you will pay to have this type of unsecured Visa card.
Help From Visa
The official Visa website features an interactive tool that will guide you along the process of finding the best unsecured Visa for your needs. Whether you are looking for an unsecured Visa for personal or business use, the information provided by Visa can steer you toward the best card for you.
You do not have to limit your search to the information on the Visa website. Review the unsecured Visa offerings from your bank or credit union and check to see if any professional or charitable organizations you are involved with offer an affiliate Visa card; these cards sometimes come with benefits that may not be available to the general public.