Unsecured Credit Cards

Unsecured credit cards are the most used source of credit and they are offered at a rate of more than 5 to 10 per week to the average consumer. This is probably the most common source of financing these days. The use of these cards with nothing to back them up has become so commonplace that it has caused many undisciplined borrowers to become indebted to the extent that they are in financial straits and often in danger of becoming bankrupt. It seems the more debt a borrower shows on their credit report, the more offers they receive.

Pre-approved offers are deceptive however, and just because the offer says, "pre-approved", there is no guarantee of being granted the unsecured credit line for actual use. Each offer has a disclaimer that indicates the company has the right to refuse the request once you have submitted the financial status. They pretend to offer what is called a "no-doc" type of loan where documented proof of income isn't required, but the debt-to-income ratio is the most common denial reason for unsecured cards.

It doesn't make sense why these offers pour in at the time a person is most financially strapped. To try to take advantage of these offers is almost a defeating process. Once the person returns the application for the card, they are denied because of their poor financial situation. What has then happened, is their report has been accessed by the company and that inquiry will stay on the report for a year. Those multiple inquiries by so many unsecured credit cards offers will play against the next true application for credit as having "too many inquiries" on their credit report in the past year.

An unsecured credit line is a very useful means of managing financial situations if only they are managed well and with a discipline that prevents the borrower from overusing the unsecured credit line. Once the cycle of overuse of unsecured credit cards begins, getting out of the cycle is very difficult, and can be financially devastating. If caught in this web, seek out financial guidance and get the help to stop the trend of paying interest that outweighs the principal portion. "Where no counsel is, the people fall: but in the multitude of counsellors, there is safety." (Proverbs 11:14). Don't wait to get professional help until you have no option than to file bankruptcy, for even that is not an option now that the laws have changed and the ability to relieve bad debt by filing is no longer feasible..

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