An unsecured credit card is one that has not been financially secured with a cash deposit.  These types of cards are typically only available to people with a good credit history.  The amount of the credit card will depend greatly on available income based on a debt to income ratio.  While an unsecured credit card is similar to a personal loan, the interest rate is higher.  Along with the higher interest rate comes more freedom.  The amount of credit available on the card usually stays fixed and is always available whereas a loan is a more temporary arrangement.  If the owner of the card wishes to increase his or her credit limit, then prompt payment of monthly fees is required.  With continuous prompt payment the credit limit may eventually be raised.

An unsecured credit card has a number of benefits.  For instance, if you have recently graduated college and need to purchase an outfit for an interview you may not have the capital readily available for such a purchase.  With an unsecured credit card, you can purchase the outfit and pay off the balance with your first paycheck.  This allows you to obtain something you need and pay for it over time.  This process could be repeated as necessary.  If you had a personal loan for the same purchase you would only be able to use the money on your line of credit once.  You would then have to pay it back and apply for another loan before you would be able to make future purchases on credit.  If you had a secured credit card, you would have to actually make a deposit into the account that was securing the credit card and so would not have access to those funds until the account was closed.

The good credit history required to obtain an unsecured credit card is needed because without it the lending institutions would not be assured that their money would be repaid in a timely manner.  Usually the better your credit history, or credit rating, the lower your interest rate will be.  One of the best places to apply for an unsecured credit card is your local bank.  Your local bank has access to your financial information and will be able to quickly determine the amount of capital you have readily available.  An additional benefit to obtaining your unsecured credit card through your bank is that you can have your monthly bill automatically deducted from your bank account.  This allows ease of payment and a consistent payment schedule will likely increase your available credit in the future.

 If you do not have a local bank where you can apply for an unsecured credit card, there are a number of other organizations you can turn to.  Many insurance carriers, schools, credit unions, and employers have associations with credit card companies that may make it easier for you to obtain a card.  If this is not an option, one can always contact a major credit company and apply to them directly or a financial institution that specializes in finding unsecured credit cards for consumers.