Secured Credit Card

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What is a Secured Credit Card

While credit cards help you easily manage financial transactions, you must meet certain eligibility parameters. A good credit score is one such term, and it isn’t easy to have a score above 750. That’s exactly where secured credit cards come into play. 


This credit card type requires you to pledge a deposit as collateral. In case you have a poor credit score or a low credit history, you can easily avail a secured credit card. So, as a first-time card user, getting a secured credit card is easy. 


However, remember that you can get this card only after you deposit a specific amount in the bank. Simply put, the amount you deposit becomes your credit card limit. By providing these secured credit cards, banks help you establish a good credit profile. 

Difference Between a Secured Credit Card and a Prepaid Credit Card 

You may get confused between a secured and a prepaid credit card. While a secured credit card works against collateral, a prepaid credit card works similar to a gift card. 


In a prepaid credit card, funds are already added, which are subsequently used when making transactions. Here are the main differences between prepaid and secured credit cards. 

Secured Credit Card

Prepaid Credit Card

Secured credit card is issued against a collateral

No collateral needed when issuing a prepaid credit card

Funds are not pre-loaded in the card

Funds are pre-loaded in the card

Usually availed by people with a zero-credit history or very poor credit score

Can be availed by any consumer

Threat of incurring debt or losing collateral if payments not made on time

Relatively safe since you can only transact up to the prepaid limit on the card 

Different Types of Secured Credit Cards

Below listed are some of the best secured credit cards available in India:

1. Bajaj Finserv RBL Bank Freedom SuperCard:

The RBL Bank Supercard is one of the best credit cards against fixed deposits that provides you the power of four cards in one.


It can be used globally, and you stand to receive the best deals on entertainment, travel, online shopping, making purchases at stores, and so on. Besides receiving reward points on spends, you can enjoy 75% of your credit limit as the cash limit with this card.


Here are a few features of this secured credit card:


  • Easy conversion of purchases to affordable EMIs

  • Up to 5% cashback on a down payment at any Bajaj Finserv partner store

  • No interest charged on withdrawing cash for a period of up to 50 days

  • Avail a loan against your current card limit for a tenure of 3 months at a monthly interest of 1.16%

2. SBI Card Unnati:

You can get this secured credit card if you have a deposit of more than ₹25,000 with SBI. Accepted globally in more than 24 million outlets, you can use the Unnati card to manage all your daily spends.

With the benefits of the contactless transaction, all you have to do is simply use the card at a secure card reader to complete any transaction. What’s more, you can add-on cards for your immediate family members too.


Here are a few features of this secured credit card from SBI:


  • Easy cash withdrawals from ATMs accepting Visa or Mastercard types

  • Use the card to pay your monthly utility bills with the help of the Easy Bill facility

  • Convert your high-value transactions to affordable EMIs

  • Get a cheque or DD against the available cash limit using the Easy Money option

3. Axis Bank Insta Easy Card:

This secured credit card comes with the unbeatable feature of guaranteed approval. In addition, you are not required to submit any proof of income. The only eligibility condition is having a fixed deposit with Axis Bank. 


A few features of the card are listed as follows:


  • Interest-free period of up to 50 days

  • Flexible credit limit

  • High cash withdrawal limits

  • Access to various dining offers

  • Fuel surcharge waivers

  • Loyalty rewards

  • Option to receive up to four add-on credit cards with the primary card

What are the Features and Benefits of a Secured Credit Card

  • Online/In-store acceptance

The credit card can be used for both in-store and online purchases.

  • High Approval Chance

There are high chances of your secured credit card application getting approved. This is because the bank/financial institution is at minimum risk, as this is usually a credit card against an FD or any collateral you provide.

  • Aids in transitioning to a regular credit card

You can use your secured credit card to increase your credit score. This, in turn, could increase the chances of getting an unsecured credit card approved in the future. 

Alternatively, if you are punctual with your payment history and achieve a respectable credit score, you can ask your credit card issuer to convert your secured credit card to a regular one.

  • Earn interest on your card

Some banks give interest on the collateral offered against a secured credit card. This way, you can earn interest on your deposit while enjoying all the perks of using a secured credit card.

  • Grace Period

Many banks or credit card issuing companies offer grace periods on the secured credit card payment. Thus, if you cannot make your credit card payment on time, you can take advantage of this facility to arrange the funds.

Secured Credit Card Offers 

A secured credit card can provide you with the following offers:


  • Reward points and cashback on purchases

  • Access to complimentary lounge facilities at airports

  • Entertainment, dining and movie offers

  • Discounts and free vouchers on offline and online purchases

  • Waivers such as those on fuel surcharge

  • Welcome benefits

  • Credit limit of up to 100% of your fixed deposit amount

  • Extensions on credit repayments

  • Facility to receive add-on cards for your family members

  • Conversion of purchases up to the specified limit into EMIs

  • Nominal joining and annual fees

  • Free credit facility up to a specified period

Pros & Cons of a Secured Credit Card 

Just like a regular credit card, a secured card also has its own share of advantages and disadvantages. Here’s a quick preview of the pros and cons of such a credit card.


Pros of a Secured Credit Card 


  • Secured credit cards can be availed even if you don’t have any income

  • Individuals with low credit scores can also avail these credit cards

  • Can improve your credit score

  • In some cases, these cards offer far better rewards than other categories of cards

Cons of a Secured Credit Card


  • The credit limit of secured credit cards is usually low

  • The fixed deposit that you pledge as collateral is forfeited if you fail to clear off your unpaid outstanding bills

How to Apply for Secured Credit Cards

Read the process of applying for a secured credit card both online and offline:

1. Online Process

If you have an existing fixed deposit, you can easily apply for these credit cards by completing the following steps: 


  • Step 1: Visit the official website of Bajaj Markets

  • Step 2: Provide your contact details along with your personal information

  • Step 3: Browse through the different secured cards provided by different banks

  • Step 4: Select the card

  • Step 5: Make an application

  • Step 6: Post-approval, you will receive your secured card

2. Offline Method

To make an offline application, you need to follow the steps given below:


  • Step 1: Visit the nearest branch of the bank and meet the credit card representatives

  • Step 2: If you do not have an existing fixed deposit, open a new fixed deposit for the required amount

  • Step 3: Fill in the application form and submit it along with the requisite documents

  • Step 4: Once your application is approved, you will receive your credit card shortly

How Does a Secured Credit Card Function

This credit instrument is relatively straightforward, and here are a few key points to note.  


  • Requires you to pledge collateral in the form of a deposit to get the card

  • Ideal choice if you are a first-time card user with no credit history

  • Your deposit acts as a security feature for the lender

  • The lender can liquidate your FD in case of any defaults in the credit card bill payments

  • Avoid missing your monthly payment and safeguard your deposit

How a Secured Credit Card Can Improve Your Credit Score

If you are someone whose credit scores are currently very low, making you ineligible for a variety of credit facilities, getting a secured credit card may help. As you continue to use your card, you create a credit history in the process. And each time you pay your outstanding dues in full on time, your credit score gets a positive boost. 


However, remember that even with a secured credit card, it takes time to improve your credit score. Depending on how low your credit score is, it may take up to 6 months for you to see a noticeable positive effect. So, always use your credit card responsibly and pay your bills on time.

Contactless Secured Credit Card 

With technological advances, you can now get a contactless secured card. These credit cards have an in-built chip that uses radio waves to complete your transaction. You are required to tap or wave your contactless card near the card reader. 


Your card information is transmitted through radio waves to the POS machine using Radio Frequency Identification (RFID) technology. For instance, the Bajaj Finserv RBL Bank Platinum Plus SuperCard uses RFID technology to complete your transactions. Here’s a look at the benefits of this contactless card:


  • Easy completion of a transaction using the RFID chip

  • Option to also use the EMV chip

  • Up to 4,000 reward points

  • Up to 50 days of interest-free ATM withdrawals

  • Up to 90 days of interest-free emergency loans

  • Option to convert your purchase into EMIs

  • Discounts, waivers and free complimentary access to airport lounges

Who Should Apply for Secured Credit Cards

Anyone with a fixed deposit in their name may apply for a secured credit card in India. That said, the card can benefit individuals like the ones mentioned below. 


  • Housewives 

  • Individuals with low credit scores

  • Individuals with low monthly income

  • Retired individuals with no stable income 

  • Individuals who do not possess valid income proof 

  • Individuals who are ineligible for unsecured credit cards 

Things to Consider When Availing a Secured Credit Card

While secured credit cards are ideal to begin your credit journey, you need to consider the following points before getting them:


  • High interest rates levied on these cards due to the risk factor associated 

  • Low credit limits when compared to the unsecured type

  • You can get a credit limit less or equal to your FD value

  • Defaults on credit card bill payments may result in the liquidation of fixed deposits

So, take into account the factors mentioned above before planning to apply for a secured credit card.

FAQs on Secured Credit Cards

  • ✔️Which different categories of Secured credit cards are available?

    You can only avail a secured credit card by pledging collateral such as a fixed deposit. However, different banks provide various categories of secured credit cards with different credit limits and features.

  • ✔️I have lost my secured credit card. What do I do now?

    You must immediately contact the credit card services of the bank, usually, a toll-free number, to report the loss of your card.

  • ✔️What are the benefits of using a secured credit card?

    It can help you build or improve your credit profile, thus rendering you eligible for an unsecured or regular credit card. This card provides a range of other benefits such as discounts and waivers, along with minimal documentation and a fast approval process.

  • ✔️How to use a Secured Credit Card?

    A Secured credit card can be used as a regular credit card.However, it is important to note that the credit card limit for a Secured Credit Card would depend on the collateral offered against it.

  • ✔️What is the minimum deposit for a secured credit card?

    The minimum deposit for a Secured Credit Card would differ from bank to bank. You can get in touch with your bank’s credit card customer care support to enquire about the minimum deposit required for availing a secured credit card.

  • ✔️Can Secured credit cards build credit?

    Yes. If you make the payments on your Secured Credit Card on time, you can improve your credit score.

  • ✔️How do you qualify for a secured credit card?

    Secured credit card is issued against a collateral. The deposits are generally cash deposits, FDs, or other assets. The type of acceptable collateral for a Secured Credit Card could differ from one bank to another. If you can provide the necessary collateral accepted by the bank, you can qualify for a secured credit card.

  • ✔️Can I convert a Secured Credit Card to a regular credit card?

    You can improve your credit score with a secured credit card. Alternatively, if your credit card issuer sees that you have been regular with your credit card payments and have achieved a respectable credit score, and meet all the credit card eligibility criteria, you can request your credit card issuer to convert your Secured Credit Card to a regular credit card.

  • ✔️How long does it take to build credit in secured cards?How long does it take to build credit in secured cards?

    Card issuers generally take anywhere from 30 to 45 days to report the issue of a secured credit card to credit information bureaus. Once the card is reported, every transaction and repayment that you make on time will start to build your credit. You can expect noticeable improvement in your credit score in a few months as long as you repay your bills within the due date.

  • ✔️How long should I use a secured credit card?

    The decision as to how long you can use a secured credit card rests with you. In fact, you can choose to use it for as long as you wish. In case your card expires, you can request the bank to provide you with a secured credit card with renewed validity.

  • ✔️Do they charge any interest rates on secured cards?

    Yes. Secured credit cards work in the same way as regular credit cards. Therefore, failing to clear off all the outstanding dues before the due date may lead to interest being levied on the unpaid outstanding amount. The rate of interest applicable for a secured credit card, however, is dependent on the type of card you avail.

  • ✔️What is a secured credit card limit?

    This limit is decided on the basis of the collateral provided against it. Hence, it is important that you make your credit card bill payments on time, as any default on payment can lead to the amount being deducted from the collateral. 

  • ✔️Where is a secured credit card accepted?

    A secured credit card is accepted at all online and offline stores, fuel stations, supermarkets, restaurants, hotels, and so on. You can use it as a regular unsecured credit card at every Point of Sales (POS) system.

  • ✔️How can I get a higher credit limit with a secured credit card?

    The credit limit depends on your total FD value or the value of the security pledged. So, the value of the collateral, the higher the limit you are likely to get.

  • ✔️Do I need any income proof for secured credit cards?

    No, as these cards are issued against pledged collateral, you need not submit income proof.