Credit cards are used in day to day purchasing of goods. One does not have to carry cash around anymore for doing ones shopping. You can even purchase goods from the confines of your home over the Internet using a card. Most people have 2-3 cards to their names and additional cards in the name of their spouse.
A secured card is offered by lenders to people having a poor or bad credit. The applicant is required to deposit a few hundreds of dollars with the lender to avail a secured credit. If the borrower defaults on his payments, then this cash is used by the lender. If you close your account, the money is refunded back to you after deducting any amount that may owed by you. A secured card works in the same way as a regular card. If you are a good customer, often lenders switch the account to a regular account within a year.
An unsecured credit card is one in which you are not required to deposit any money with the lender. You do not need to have a minimum amount of money present in your bank savings account to make use of an unsecured credit card. The advantage of this is that you can buy something first and pay for it much later. It is similar to having a tab at a bar! It is necessary to have sufficient credit points in order to apply for an unsecured credit card. The credit bureau needs to be absolutely convinced that you are a low risk customer, before they allow you to apply for an unsecured credit card.
Most of the times, card companies approach people with their offers. They usually, mail you or approach you online with their applications. All you have to do is to fill out the application and send it back to them and soon you get your card account. However, if no credit card companies have approached you yet, you can always go online and search for the best deals available. Nevertheless, do not forget to read the fine print on the application. Many companies offer very low interest rates initially, but if you default on your payment even by a couple of days, the interest rate gets hiked to as high as 25% and remains at that for the life of the card. This can be exorbitantly pricey for most people.
Hence, one needs to be very careful when obtaining an unsecured credit card. It is absolutely necessary to read the terms and conditions properly before signing up for any offer. You should always be on the look out for frauds and cheats. There may be scam artists who are just trying to steal your identity and money. You can go through the offers of all leading credit card companies before selecting the deal that is most beneficial and offers the least annual percentage rate (APR) and the lowest fees before making your choice.