Secured Card

Credit cards are usually the ones where you don't need to give anything valuable to use them. But, there are also special ones called 'secured' credit cards. These cards are connected to a fixed deposit. They are good for people who want to make their credit score better but can't get the regular credit cards. Here is all you need to know about what a secured credit card is and how it works.

What is a Secured Credit Card?

Secured credit cards are kind of like regular credit cards, but you have to put some money in first (called a fixed deposit). After that, they work the same way as a regular card. You get a limit, usually 70-90% of what you put in (90% for Step UP Credit Card). You can buy things online or in stores and pay the bill later. But, if you don't pay the full amount on time, they might charge you extra fees, like regular credit cards do.

Secured credit cards offer various advantages for their users. Here are some of the benefits:

  • Build good credit history: Banks usually give credit cards to people with a good history of handling money. But if someone doesn't have that, they can use a secured credit card to start building a good money track record. By using this special card and paying bills on time, they can improve their credit score over time, even if they can't get a regular credit card.
  • Easy for those with no credit history: If someone doesn't have a credit history, they can get this card to start making one. This helps them in the future when they want to get approved for loans.
  • Increase chances of low-interest loans: When you use various financial products from the same bank, they often give you loans at lower interest rates. This applies to different types of loans like personal loans, auto loans, or home loans.
  • Increase the credit limit as well as earn interest on the Fixed Deposit: Customers choosing a secured credit card usually only need to pay the processing fee and nothing extra. This card allows cardholders to raise their credit limit and also earn interest on their fixed deposits.

A secured credit card is linked to a fixed deposit that you make with a bank. This card is designed for people who are unable to get regular credit cards due to low income or a poor credit history. The key feature is that the bank can use the deposit to cover your debts if you can't make the required payments. It's a way for individuals to build or rebuild their credit.

If you have a secured credit card, you need to keep the fixed deposit with the bank as long as you use the card. Usually, the bank allows you to use up to around 85% of the deposit as a credit limit. So, these cards cards work very much similar to those of regular credit cards, and you can even earn interest on the deposit with the bank or another financial institution.

Apply for Secured Credit Card with MybankingTips

Apply Now

A few of the popular secured credit cards are mentioned in the table below:

Credit Card Annual Fee Fixed Deposit Amount Best Suited For
ICICI Bank Coral Credit Card Rs. 500 Rs. 30,000 Entertainment, Travel
ICICI Bank Rubyx Credit Card Rs. 2,000 Rs. 75,000 Travel, Shopping
SBI Advantage Plus Card Rs. 500 Communicated at the time of sourcing Building Credit Score
SBI Card Unnati NIL (first 4 years) Rs. 499 (5th year onwards) Rs. 25,000 Rewards, Fuel
ICICI Bank Instant Platinum Credit Card NIL Rs. 20,000 Dining, Entertainment
Kotak DreamDifferent Credit Card NIL Rs. 10,000 Entry-level Consumers

1. I do not have a credit card. Can I get a secured credit card?

Yes, you can avail a secured credit card against the fixed deposit in the bank.

2. My bank has refused my credit card application. How can I get a credit card easily?

If a bank rejects your credit card application because you don't meet their requirements, you might consider applying for a secured credit card instead.

3. What is the credit limit offered on the secured credit card?

The credit limit on the secured credit card is typically between 80% to 85% of the amount you deposited in the fixed deposit with the bank.

4. I want to get a higher credit limit. What should I do to get a higher limit on my credit card?

Putting a higher amount in the fixed deposit increases your likelihood of securing a higher credit limit on your secured credit card.

5. I do not have a fixed deposit in the bank. How will I get the secured credit card?

First, you'll need to put money into a fixed deposit. After that, you can apply for a secured credit card with the same bank.

Apply for Secured Credit Card with MybankingTips

Apply Now