Grading companies such as BGS and PSA have changed card collecting forever with the explosion of grading sportscards and/or non-sports cards. 

Keeping up with your sportscards used to entail throwing every card you owned into a shoebox and sticking that in a closet or drawer in your room.  The new ritual of card collecting ensures that much better care is taken when dealing with your newfound treasures.  Card packs are no longer 'ripped' open, but gently parted to ensure that no corners get dinged or scratched in the process.  If a truly nice card is found it is carefully inserted into a 'penny' sleeve, further placed in a rigid holder, and promptly mailed to a grading service where it is encased in hard plastic. The views on how you collect sportscards are as varied as the different types of cards out there, but one thing has not changed, and that is that most everyone still enjoys finding that 'special' card and making it their own.

Ungraded Cards: 

These are cards that are not graded by any service and are in many ways the same as when they were opened from packs.  Many of these cards have seen the normal wear and tear from time, elements and people actually handling the cards.

Who should collect ungraded cards? 

Individuals who derive their pleasure through the love of the sport and owning a 'piece' of their favorite players and/or teams through that small piece of cardboard.  Others with limited finances may also benefit greatly from an ungraded collection.

Pros of collecting ungraded cards: 

1.)  Ungraded cards are noticibly cheaper than their graded counterparts, and are generally much easier to find.  If you are the average collector that is on a limited budget, because the cost of the cards always outweighs your spending money, then collecing ungraded cards may provide you with a larger collection and a wider range of players than you might be able to afford when trying to obtain graded cards.

2.)  Many 'old timers' when it comes to collecting will swear that you aren't really collecting if you cannot actually handle the cards you own.  If you cannot take your 1989 Upper Deck Griffey out if its holder and actually view it without the distortion of plastic you aren't truly enjoying yourself.  I know many collectors who specialize in only ungraded cards that will admit a certain fondness for the ability to actually be able to handle their collection.  Many believe an ungraded collection is much more 'personal'.

3.)  Someone with a professional eye can increase their investment potential by picking up sharp looking ungraded cards and having them graded on their own.  This takes some time and experience to finally learn just what it takes to make a 'perfect' card.  There is something very fulfilling about being able to pick out a card you think is super and sending it out to have it return a perfect 10 grade.

Cons of collecting ungraded cards:

1.)  For much the same reason that it is a good thing for ungraded cards because you can pick them up fairly inexpensively it makes it a con when it comes to reselling or establishing the value of your collection.  Ungraded vintage (older than 15 years at least, when the player has usually retired) cards tend to decrease in value noticibly right after the player quits playing and then stabalizes.  That same card may eventually rise back up in price throughout the years, but the value of your card is likely to be in the same ballpark figure as it was when you purchased it years before.

2.)  The safety and condition of your collection is much more succeptible to the elements and other collectors than it is with a graded collection.  Whether you keep your cards in rigid holders, binders, or even that old shoebox you still have to be wary of the safety of your cards.  The spilling of a drink, drop of ink, or spot of food can be the downfall of any card that mistakenly gets in the way of a hungry collector.  

Graded Cards: 

 These are cards that have been given a numerical value based on that companies criteria for determining just how close to 'perfect' that card is.  The card is sealed in a hard plastic holder with the grading information displayed prominently at the top.  Each company's criteria for a 'perfect' card is somewhat different, but should involve looking at the card edges, corners and surface through a microscopic lens.  The companies may view the surface color, clarity,  card cut, and any minor wear when giving a grade to a card.  The final grades for each company usually include a number between 1 and 10 with 10 being a 'perfect' or 'pristine' card.  You need to ensure you read up on the companies to ensure which is suitable for you as they vary in experience and collector's trust.

Who should collect graded cards?

Someone who purchases graded cards for their collection either needs to have abit more money to place into their collection than the average collector or will have to be very patient when it comes to finding better deals at better prices.  The limited availability of cards, combined with collectors wanting that one special card, often drives the prices of graded cards well up above normal values.  While there are exceptions to every rule,  I have often found out that many people who only collect graded cards are less about the players and sport than they are about collecting in general.  These people 'need' something to collect and since they enjoy sports they have tailored that need to sportscards.  It seems that many of those who crave that graded card are interested only in obtaining that which so few others have.   

Pros of collecting graded cards:

1.)  One of the biggest benefits of trading in graded cards is the fact that you know exactly what you are getting when purchasing or trading.  With established grading companies you know that the graded card has met certain specifications.  There is a certain amount of safety in purchasing graded cards because you can be sure that you are not purchasing a fake, reprint or over-graded card.   

2.) The most prevailing factor in collectors turning to graded cards seems to be the investment potential or resell potential of graded cards.  One of the biggest reasons ungraded cards rarely come close to book value when selling or trading is that collectors often distrust the grading or description of the seller.  Is that MINT card truly so?  This is not the case with graded cards as collectors will pay closer to true value for the card if they are certain it is of that condition.  There are several collectors who have taken a more business-like approach to collecting by building 'portfolios'.  These collectors often have minimal interest in the cards themselves, but are interested only in the long-term potential for profit in those cards.

3.) This is a minor benefit to collecting graded cards, but many individuals who have limited their collecting to only graded cards find that their collection becomes more organized over time, which is the direct opposite of the normal card collector whose collection 'grows' over time often taking over garages and residences.  The fact that graded card collectors often buy fewer cards and the stackability of many of the rigid holders often can streamline the collector's mess.

Cons of collecting graded cards:

1.) The largest single distractor for collecting graded cards is the fact that they are initially more expensive than their ungraded counterparts (sometimes MUCH more expensive).  The limited availability and certainty that a professionally graded card brings also commands an exclusive price.

2.) There just aren't enough good cards to go around.  If everyone had all the best cards then there really wouldn't be much point in collecting, but since there are relatively few top condition cards of the more popular players then the adage of demand being greater than supply comes into play.  Whether it is with older or newer cards, if more people would like a card of a player than there are nice cards of them being sold the prices of  those cards will be driven up. 

My Personal Take on the Subject:

Do what makes you happy!!!  There is no right or wrong way to collect.  I personally collect both ungraded and graded cards.  I pick up some of the older cards in the best condition I can find and/or afford them to add to my collection.  Many newer stars and my favorite players I really don't mind picking up ungraded cards as it means that I can get more cards for my dollar and actually have more of my favorites to enjoy.