Many many people believe that because of their bad credit, unsecured credit cards are not available to them. While it could be more difficult, there are options for people with bad credit who want an unsecured credit card to build their credit or have available for use in an emergency. While a secured credit card is the most almost always recommended option for all the people with bad credit, unsecured credit cards ARE available - even for those with the worst credit.

Bad Credit: Unsecured Credit Cards vs. Secured Credit Cards

One of the easiest ways to get a credit card when you have bad credit is to opt for a secured credit card. With a secured credit card, you deposit funds in a bank designated by the credit card company to serve as a security deposit - an assurance that theyll get their money if you default on payments. Depending on the lender, that deposit might be equal to your desired credit limit, or slightly higher or lower. A security deposit of $300, for instance, might get you a $150 line of credit with one business , a $300 line of credit with another, and a $400 one with yet a third. The interest rate is almost always competitive, since the business has a guarantee of getting its money if you do not contruct payments.

An unsecured credit card requires no security deposit. A bad credit unsecured credit card will generally have either a high APR (annual percentage rate), high fees, or both. How do the two stack up against each other? Heres a comparison from two actual credit card offers that are sitting on my desk as I write:

Secured Credit Card
Security Deposit: $250
Annual Fee: $35
Setup Fee: $35
APR: 15.40؍
Credit Limit Increases: $100 increments, each require $100 deposit

Bottom Line: It will cost you $370 to maintain a $250 credit limit for the first year, with at least $250 up front, at an APR of 15.40&#-2513;ull have $170 available credit upon receipt of your card. You will have to put up an additional $100 every time you want to increase your credit limit.

Bad Credit Unsecured Credit Card
Annual Fee: $48
Setup Fee: $29
Participation Fee: $72 (annual, billed at $6 monthly)
Program Fee: $95 (one time fee)
APR: 9.9؍
Credit Limit Increases: $25 (per increase of $100, at their discretion)

Bottom line: It will cost you $244 for the first year, all of it billed to your credit card on your first statement, to maintain a $250 credit limit with an APR of 9.9&#-2513;ull have $72 credit available upon receipt of your card.

In the long run, while a bad credit unsecured credit card may cost you more, you will not be tying up your money up front. Either card will help repair your credit as you make payments on time and regularly, but the unsecured card has an APR thats almost 5ower. Youre the only one who may decide which is the better option for you - but it makes sense to weigh all your options before you decide that your only way to have a credit card is with a security deposit.

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