Contrasts are Important: Secured Versus Unsecured Credit Cards (cont.)
Contributed by Alix Mcmurray
The Unsecured Credit Card as Status Symbol
Secured credit cards are made to resemble unsecured credit cards so that "only you and your bank" know that collateral is backing the card. Why? Because a third party might rightly or wrongly assume that you can't be trusted with unsecured debt, and must therefore be tethered to actual existing funds. Well, that isn't such a bad move for many folks for whom credit has at one point or another become yet another addiction. The secured credit card, with its trappings of being unsecured, can be a great self-help tool in the struggle for credit rehabilitation.
The Calculated Risk of Having an Unsecured Credit Card
Even if you do anticipate a reliable income in your future, you can minimize the risks of maintaining an unsecured credit card account by avoiding some undesirable aspects of credit card ownership. You can shop for a card with no annual fee, for instance. You can also time larger, anticipated purchases so that they are charged and fully paid for during an introductory period with the ubiquitous "0 percent APR."
You can exert some restraint in your spending habits even within your revolving account, and pay off your monthly balance every month, thus incurring no finance charges. And, taking the larger view, you can refrain from using a credit card to simply stay afloat. If you use an unsecured credit card as a tool to live beyond your earned means, then your future may become very unsecured indeed.
