A secured credit card is a security-backed credit card issued against a fixed deposit as collateral. Though these cards function the same as a regular credit card, the credit limit is assigned as per the fixed deposit’s value, usually 70-90% of the FD amount. Additionally, secured cards can be availed with a fixed deposit value as low as Rs. 2,000. This marks these cards as a suitable choice for people who are new to credit history or who don’t have a good credit score. Additionally, unemployed individuals or students can also avail these as no income proofs are required.
Cardholders can use the card to make both online and offline purchases and pay the bills as and when due. If one fails to make the full payment on time, finance charges will be applicable, just like regular credit cards. If the user defaults, the card issuer will recover the amount through the fixed deposit.
Benefits of a Secured Credit Card:
1. Higher chance of approval: Since secured credit cards are issued against FDs, the approval of the credit card is guaranteed even if you have a poor credit score. Additionally, in comparison to general card applications, these involve minimal documentation and paperwork.
2. Helps in building credit score: In cases when people with no or bad credit history find it difficult to avail themselves of a new credit card, secured credit cards can be really helpful. Getting a secure card and ensuring responsible usage with on-time and full payments by the due date helps in building a positive credit record, ensuring lenders of the credibility.
3. Dual benefits: With a secured credit card, customers can earn the best benefits of both credit cards and fixed deposits. They can keep earning the interest on their fixed deposits while availing themselves of the benefits of a credit card at the same time.
4. Rewards: Credit cards are feature-loaded with rewards, discounts, or cashback benefits that offer real value-back, depending on the card type. This helps users to save on their everyday spends.
5. Complimentary benefits: Beyond rewards and cashback, credit cards offer some complimentary benefits like lounge access, memberships, brand benefits, etc., that regular fixed deposit customers don’t get.
Top Secured Credit Card in India:
| Secured Credit Card | Annual Fee | Minimum FD Amount |
| Step UP Credit Card | Nil | Rs. 2,000 |
| SBI Card Unnati | Nil (Rs. 499 from 5th year) | Rs. 25,000 |
| IDFC FIRST WOW! Credit Card | Nil | Rs 20,000 (Rs 25,000 for NRIs) |
| Kotak 811 #DreamDifferent Credit Card | Nil | Rs 5,555 (for 811 saving account customers); Rs 5,000 (for Non 811 saving account customers) |
| ICICI Bank Instant Platinum Credit Card | Nil | Rs. 50,000 |
Note: SBM Bank is not accepting new applications for Step Up Credit Card. Content on this page is for information purpose only.
Who should get a secured credit card?
Secured credit cards can be a good choice for the following:
- Beginners with entry-level jobs
- Retired/Aged individuals with no regular source of income
- Individuals with poor credit history; to whom banks are not offering unsecured cards
- Individuals who do not have income proof, but need a credit card
- Home-makers, unemployed people
- Students
Note: The customer holding a secured credit card has to continue with the fixed deposit with the issuer till he/she uses the card.
