I’m looking into a credit card for emergencies. I am shopping around and am not even sure what half of this stuff means. Can anyone help me?
What is unsecured mean? That doesn’t sound like something good.
What is a good apr?
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What is an unsecured credit card? What is apr? ?
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APR is Annual Percentage Rate. That’s the interest rate they charge you for carrying a balance. Lower is better. I wouldn’t want one that’s in double digits. I would say 7% – 8% would be a good rate at the moment.
Secured means that there is a bank account somewhere that they can take if you don’t pay. Unsecured means they just trust you to pay and, if you don’t, they have to go to court and get a judgment. Obviously unsecured is more difficult to get. Most of the people with credit card debt problems did it with unsecured accounts.
Be sure to read all the fine print. Many cards have a low APR, however, if you are late on a payment they go to a "default rate" that is very, very high plus they add penalties.
The best thing to do is to save an emergency fund and not use a card for "emergencies". Don’t charge anything you can’t pay off at the end of the month and PAY THE CARD OFF every month. That way you don’t pay interest so the rate won’t matter.
Unsecured means there is nothing but your faith and signature that backs the card. You don’t have to have X amount of funds in the account to spend X. The card is not backed by anything you own.
Apr Annual percentage rate. A good rate is 0.00%. Under 8 is okay, 18% not so much.
Just pay it off every month and you will not have to worry about the APR because most credit card companies don’t charge interest for the first month or until the payment is due.
RaGS sez : Unsecured credit card : a credit card which does not require that you pay a sum in advance, for example $500, with which you may then charge purchases against the prepaid amount. APR is the annual percentage rate of interest that you will pay on purchases that you do not pay in full each month. Shop around for rates. These days, with your first credit card, if you can find anything in the area of 12%, grab it. It’s likely going to be 18% to 21%. That’s my guess.