A Secured Credit Card is provided by financial institutions against a collateral to those who are unable to get a regular credit card through the usual banking channels due to a low credit score or other reasons.
In India, you can get a Secured CC by making a cash deposit against a credit card. Typically, the cash deposit will be a fixed deposit. Your credit card limit will be in tune with the fixed deposit and you can further increase the credit limit by increasing the fixed deposit amount. The benefits of a Secured CC include high chances of approval, besides providing you with the opportunity to build your credit profile.
Read how to apply for Secured Credit Card both online and offline:
If you have an existing fixed deposit, you can easily apply for the Secured credit cards by completing the following steps:
Step 1: Visit the official website of Finserv MARKETS.
Step 2: Provide your contact details along with your personal information.
Step 3: Browse through the different secured CCs provided by different banks.
Step 4: Select the card.
Step 5: Make an application.
Step 6: Post-approval, you will receive your secured CC.
For making 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 don’t have an existing fixed deposit, open a new fixed deposit for the required amount.
Step 3: Fill the application form and submit it along with the requisite documents.
Step 4: Once your application is approved, you will receive your Secured CC shortly.
The credit card can be used for both in-store and online purchases
There are high chances of your Secured Credit Card application getting approved. This is because the bank/financial institution is at minimum risk as an unSecured Credit Card is usually a credit card against an FD or any collateral provided by the cardholder.
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 credit card.
Some banks give interest on the collateral offered against a secured credit card. This way, you can also earn interest on your deposit while enjoying all the perks of using a secured credit card.
A lot of banks or credit card issuing companies offer grace periods on the Secured Credit Card payment. Thus, in case you are not able to make your credit card payment on time, you can take advantage of this facility to arrange the funds.
Below listed are some of the best secured credit card available in India::
The RBL Bank Supercard is one of the best credit cards against fixed deposits, that provides you with 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.
The second among the list of best Secured credit cards against fixed deposit, this card provides extended credit facility at interest rates as low as 2.25% per month. It is also equipped with the ‘Easy Money’ facility, allowing you to receive a cheque or demand draft for the cash required. You can also transfer credit in this card from other credit cards at marginal processing fees. What’s more, once you avail this card, you are eligible for the ‘Encash’ facility, allowing you to open a fixed deposit of either ₹25,000 or ₹50,000. You are billed either ₹2,500 or ₹5,000 per month as EMI for 11 months, for opening the fixed deposit.
This best Secured Credit Card comes with the unbeatable feature of guaranteed approval. You are not required to submit any proof for income. The only eligibility condition is having a fixed deposit with Axis Bank. Other features include an interest-free period of up to 50 days, flexible credit limit, and high cash withdrawal limits. You also get access to various dining offers, fuel surcharge waivers and loyalty rewards. You can also receive up to four add on credit cards with the primary card.
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.
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.
The Secured Credit Card limit is decided on the basis of the collateral provided against it. 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.
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.
With the advances in technology, you can now get a contactless secured CC. 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. Through radio waves, your card information is transmitted to the POS machine, using the 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 interest-free ATM withdrawals.
Up to 90 days interest-free emergency loans.
Option to convert your purchase into EMIs
Discounts, waivers and free complimentary access to airport lounges.
Often, people get confused between a Secured credit card and a Prepaid credit card. While a Secured credit card works against a collateral, a Prepaid credit card works similar to a gift card where funds are already added to it and which are subsequently used when making transactions. Let us understand the main differences between Secured credit card vs Prepaid credit card in detail:
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 car
Usually availed by people with zero-credit history or very poor credit score
Can be availed by people with good credit score
Threat of incurring debt or losing collateral if payments not made on time
Relatively safe since transactions are incurred only against the funds added to the card
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.
You must immediately contact the credit card services of the bank, usually, a toll-free number, to report the loss of your 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.
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.
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.
Yes. If you make the payments on your Secured Credit Card on time, you can improve your credit score.
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.
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.