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Learn how a secured credit card works, its costs and benefits, and how it can improve a low credit score.
Last updated on: April 10, 2026
A secured credit card is issued against a fixed deposit that you place with a bank. This deposit acts as security, which lowers the bank’s risk and makes the card easier to get, even if you have a low or no credit history.
The credit limit is usually linked to the deposit amount. For instance, if you open a fixed deposit of ₹25,000, your credit limit may be similar, based on the bank’s terms. You can use the card for everyday spending such as shopping, utility bills and online payments.
Like any other credit card, you receive a monthly statement showing your total spending and the amount due. Each timely payment is reported to credit bureaus, which helps build your credit score over time. A stronger score can improve your chances of getting loans or an unsecured credit card in future. Once you close the card and clear all outstanding dues, the bank releases your fixed deposit.
Here are the secured credit cards on Bajaj Markets in 2026, with key fees and benefits at a glance:
| Credit Cards | Joining Fee | Key Benefits |
|---|---|---|
Nil |
Get up to 7% value back as NeuCoins on qualifying purchases made via the Tata Neu app and associated Tata partner brands |
|
Nil |
Earn up to 4X reward points on every purchase |
|
₹499 |
Get 100% cashback up to ₹500 on your first UPI transaction within 15 days of receiving the card |
|
₹199 |
Joining benefits worth ₹2,250 including savings on HPCL fuel spends and car rental discounts |
Disclaimer: Fees, features and benefits may change at the issuer’s discretion; please verify details before applying.
Here are the key features and benefits of a secured credit card that make it a practical option for building credit in India:
Since the card is backed by a fixed deposit, approval is generally simpler, even for those with a low or no credit history.
Regular and timely repayments are reported to credit bureaus, which can gradually improve your credit score.
Your fixed deposit remains in your name and earns interest while serving as security for the card.
The credit limit is linked to your deposit, which helps prevent overspending and encourages financial discipline.
Banks usually offer a credit limit of 75% to 90% of the fixed deposit amount, depending on their policy.
You can use the card for online and offline purchases across India and internationally, wherever credit cards are accepted.
Many secured credit cards allow you to convert large purchases into easy monthly instalments.
With consistent and responsible use, you may become eligible to upgrade to an unsecured credit card over time.
Here are the key interest rates, fees and charges you should understand before choosing a secured credit card:
| Charge Type | What It Means |
|---|---|
Interest Rate (APR) |
If you do not pay the full bill by the due date, interest is charged on the remaining amount at the bank’s Annual Percentage Rate (APR) |
Joining Fee |
Some banks charge a one-time fee when the card is issued, while others offer cards with no joining fee |
Annual Fee |
Certain cards have a yearly maintenance fee, which may be waived if you meet a minimum spending requirement |
Late Payment Fee |
If you miss your payment due date, the bank adds a penalty fee along with interest on the unpaid balance |
Cash Advance Fee |
Withdrawing cash using your credit card attracts an extra fee and interest from the day of withdrawal |
Overlimit Fee |
Spending beyond your approved credit limit may lead to a penalty charge from the bank |
Foreign Transaction Fee |
International purchases may include an additional charge on the transaction amount due to currency conversion |
Card Replacement Fee |
If your card is lost, stolen or damaged, the bank may charge a fee to issue a new one |
Tip
Treat your secured credit card like a debit card — only spend what you can repay in full each month. The FD earns interest, but revolving credit card debt at 36–42% APR will far outpace any FD returns.
Here is a clear comparison to help you understand how secured and unsecured credit cards differ before you decide which one suits you best:
| Parameter | Secured Credit Card | Unsecured Credit Card |
|---|---|---|
Security Requirement |
Requires a fixed deposit as security, which acts as collateral for the bank |
Does not require any deposit or collateral |
Eligibility |
Suitable for individuals with low, poor or no credit history |
Usually requires a good credit score and stable income |
Credit Limit |
Generally 75% to 90% of the fixed deposit amount, depending on bank policy |
Decided based on your income, credit score and repayment history |
Approval Process |
Approval is simpler because the card is backed by your deposit |
Approval depends on credit checks and financial assessment |
Target Users |
First-time credit users or those looking to rebuild their credit score |
Individuals with an established credit profile and steady income |
Upgrade Option |
May be upgraded to an unsecured card after consistent repayment behaviour |
Already a standard credit card with no security requirement |
Here are the types of individuals who may benefit most from applying for a secured credit card:
Individuals with a low or poor credit score who want to improve their credit profile through regular repayments
First-time earners who have never used a credit card and need to build a credit history from the beginning
Students and young professionals who want to learn responsible credit usage in a controlled way
Self-employed individuals or freelancers who may find it harder to qualify for an unsecured credit card
People whose previous credit card or loan applications were declined due to limited credit history
Individuals planning to apply for a home loan, car loan or personal loan in the future and need to strengthen their credit score
Those who prefer a credit limit linked to their savings to reduce the risk of overspending
Here is how a secured credit card can steadily improve your credit score when used in a responsible manner:
Banks report your repayment behaviour to credit bureaus, and timely payments reflect positively on your credit record.
If you have no prior borrowing history, regular usage helps create a formal credit profile in your name.
Paying your full bill on time each month shows lenders that you can manage credit responsibly.
Since your limit is linked to your fixed deposit, it becomes easier to maintain a low usage ratio, which supports a better credit score.
The fixed deposit backing lowers the chance of serious defaults, helping you avoid major damage to your credit history.
As your credit score improves, your chances of approval for home loans, car loans and unsecured credit cards also increase.
Here are the key risks and limitations of a secured credit card that you should understand before applying:
You must block a fixed deposit with the bank, which reduces your immediate access to those savings.
Interest rates on outstanding balances can be high if you do not pay the full amount by the due date.
Missing payments can still lower your credit score despite the card being secured.
The credit limit is usually lower than that of an unsecured credit card.
Banks may charge joining, annual or late payment fees depending on the card terms.
Cash withdrawals attract extra charges and interest from the date of transaction.
Closing the card before clearing all dues may delay the release of your fixed deposit.
Not all secured credit cards offer premium rewards or lifestyle benefits.
Here are the common eligibility criteria you should review before applying for a secured credit card:
You must be an Indian resident and usually at least 18 to 21 years old
A fixed deposit of around ₹10,000 to ₹25,000 or more is generally required
Valid KYC documents such as PAN and Aadhaar cards must be provided
A stable source of income or regular banking activity is preferred
Serious loan defaults or fraud records may lead to rejection
Some banks may require an active savings account with them
You must agree to the bank’s fees, interest rates, and repayment terms
Here are the basic documents you typically need to submit when applying for a secured credit card:
| Document Type | Accepted Documents |
|---|---|
Identity Proof |
PAN Card, Aadhaar Card, Passport or Voter ID for identity verification |
Address Proof |
Aadhaar Card, Passport, Driving Licence or a recent utility bill showing your current address |
Income Proof |
Usually not mandatory, as the fixed deposit acts as security for the card |
Photograph |
A recent passport-sized colour photograph, if required by the bank |
Fixed Deposit Proof |
Copy of the fixed deposit receipt or official acknowledgement from the bank |
Here is a simple step-by-step process to apply for a secured credit card online:
Click on ‘Check Eligibility’ to begin your secured credit card application
Enter your basic details such as date of birth, mobile number and occupation
Complete the verification by entering the One-Time Password (OTP) sent to your registered mobile number
Review the pre-filled information, including your PAN number, residential PIN code, email address and income details
Compare the available secured credit card options and choose the one that best suits your needs
Click on ‘Submit’ to complete your application and await further communication from the issuer
Increasing your credit limit on a secured credit card can improve flexibility and support a better credit score when managed responsibly.
The most common way to raise your limit is by increasing your fixed deposit amount, as the credit limit is usually linked to the deposit value. When you add more funds to the deposit, the bank may revise your limit in line with its policy.
Maintaining a strong repayment history can also help. Paying your dues on time, avoiding late fees and keeping your usage low show responsible credit behaviour, which may make you eligible for a limit enhancement.
Some banks also provide pre-approved limit increases after reviewing your account performance. Before accepting any increase, ensure it matches your financial capacity and spending needs.
Upgrading to an unsecured credit card is possible after you build a strong repayment record with your secured card. Banks typically assess your payment history, credit score and overall account conduct before offering this option.
Consistently paying your full bill on time and maintaining low credit utilisation can improve your chances of receiving an upgrade offer. In some cases, the bank may extend a pre-approved offer, while in others you may need to submit a fresh request.
Once the upgrade is approved and all outstanding dues are cleared, the fixed deposit linked to your secured credit card is released. An unsecured credit card may offer a higher credit limit and additional benefits, but it also requires careful financial management.
The security deposit is refunded after you close your secured credit card and clear all outstanding dues. Before releasing the fixed deposit, the bank verifies that there are no pending payments, interest charges or fees on the account. Once the balance is fully settled, the deposit is released as per the bank’s process, usually back to your linked account.
If you upgrade to an unsecured credit card, the deposit may also be returned after the upgrade is completed and all dues are cleared. Ensuring that your account has a zero balance helps avoid delays in receiving your funds.
Reviewer
A secured credit card is issued against a fixed deposit that acts as security for the bank. It works like a regular credit card but is easier to obtain, especially for individuals with low or no credit history who want to build a credit score.
Secured credit cards may offer rewards, cashback, fuel benefits or entry-level features, depending on the issuer. Some focus on credit building, while others combine fixed deposit security with lifestyle benefits similar to standard credit cards.
The minimum deposit required for a secured credit card usually starts from around ₹10,000 to ₹25,000, though the exact amount depends on the bank’s policy and the card variant selected.
The deposit amount varies by issuer and typically determines your credit limit, with most banks requiring a fixed deposit ranging from ₹10,000 to ₹50,000 or more.
The credit limit on a secured credit card is generally 75% to 90% of your fixed deposit amount, depending on the bank’s terms and risk assessment guidelines.
Yes, regular and timely repayment of your secured credit card bill is reported to credit bureaus, which can gradually improve your credit score and strengthen your credit profile.
In case the goal is to build credit, using a secured credit card for six to twelve months with consistent on-time payments is often sufficient, before considering an upgrade.
Many banks allow conversion to an unsecured credit card after reviewing your repayment record, credit score and account behaviour over a sustained period.
Interest is charged only if you do not pay the full outstanding balance by the due date, and the rate is similar to that of standard credit cards.
A secured credit card can be used for online and offline purchases across India and internationally, wherever the card network is accepted.
Cash withdrawal is usually allowed, but it attracts a cash advance fee and immediate interest charges from the date of withdrawal.
You can increase your secured credit card limit by adding more funds to your fixed deposit or by maintaining a strong repayment record that qualifies you for a limit enhancement.
Immediately inform the bank’s customer care or block the card through mobile banking to prevent misuse and request a replacement card as per the issuer’s process.
To apply for a secured credit card, open a fixed deposit with the issuing bank, complete the KYC process and submit the application either online or at a branch.
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