Credit cards are a highly convenient financial tool. They can be used to pay for everyday purchases as well as big-ticket items. Besides the convenience, credit cards offer numerous other benefits like reward points, discounts on shopping, entertainment and lifestyle spends, security from thefts, etc.
To qualify for a credit card, you need to meet some eligibility requirements. Banks usually deny credit cards to customers who have low or no credit scores, don’t meet the income eligibility requirements, hold risky job profiles, or people outside the formal job industry like freelancers, homemakers and retired individuals.
It’s the classic Catch-22 situation. A credit card can help build your credit profile, but to qualify for a credit card, you need a good credit score. So, how do you make that happen?
This is where secured credit cards come into the picture.
What are secured credit cards?
Also known as credit cards against fixed deposits, a secured credit card is one of the best ways to build your credit history from scratch or boost your poor credit profile. Unlike regular credit cards that are issued without any collateral, secured credit cards require you to provide a collateral (usually a fixed deposit) for getting approval for the card.
Secured credit cards work just like a regular credit card. You can use it to pay for online purchases, PoS transactions and much more. However, the one major difference is that these cards are issued against a fixed deposit, you hold with the bank. If you default on the credit card payment, the card issuer will recover the outstanding balance by dissolving the fixed deposit.
How do secured credit cards help to build or repair your credit scores?
Secured credit cards are a great tool to build your credit history from scratch or improve your current scores. When you pay your credit card bills on time, the card issuer reports your payments to the credit bureaus. This can help in improving your credit history and scores, especially if you’re new to the world of credit or if you’re looking to repair your credit history.
Salient Highlights of Secured Credit Cards
Top 5 Secured Credit Cards in India
Now that we’ve seen the benefits and features of secured credit cards, let’s check out the top 5 secured credit cards in India.
It’s one of the most popular secured credit cards in India. It can be used domestically as well as overseas. To apply for the card, you have to submit the credit card application form as well as the fixed deposit application form at SBI.
Credit Limit: up to 85% of the FD amount
Joining Fee: Rs. 500
Annual Renewal Fee: Rs. 500
Features & Benefits
It’s a great starter credit card for individuals who are getting their first credit card. It comes with chip & pin security, thereby making it highly secure. You can apply for the card if you hold a fixed deposit at Axis Bank or when you open a new FD at Axis Bank.
Credit Limit: up to 80% of the FD amount
Joining Fee: Nil
Annual Renewal Fee: Nil
Features & Benefits
The ICICI Bank Instant Platinum credit card is a great choice for you if you’re looking for an instant credit card. The application process is quick and hassle-free and can be completed online or at your nearest ICICI bank branch.
Credit Limit: up to 80% of the FD amount
Joining Fee: Nil
Annual Renewal Fee: Nil
Features & Benefits
This card has the one of the lowest FD requirements of all secured cards in the market. Bank of Baroda assures guaranteed card issuance against an FD deposit of minimum Rs. 15,000. You don’t have to provide any other additional income proof or other supporting documents.
Credit Limit: up to 80 to 90% of the FD amount
Joining Fee: Nil
Annual Renewal Fee: Nil
Features & Benefits
The DreamDifferent credit card from Kotak Mahindra Bank is free for life and comes with instant approval. The entire application process is online and completely paperless.
Credit Limit: up to 80% of the FD amount
Joining Fee: Nil
Annual Renewal Fee: Nil
Features & Benefits
Tips to build your Credit using a Secured Credit Card
Here are a few tips to keep in mind, while trying to build your credit using a secured credit card:
Bottom Line
Secured credit cards are an excellent choice for individuals who don’t have a regular income like retired persons, homemakers, freelancers. It also works well for individuals who have zero or low credit scores, and those who don’t qualify for the eligibility requirements set by the bank.
Compare the best secured credit cards in the market and choose the right one that works for you.
As the world has globalized, businesses are striving to expand their reach across regions, which…
Key Takeaways: Understanding how Electronic Logging Devices (ELDs) contribute to road safety. Exploring the regulatory…
In a world where grace and poise often take a backseat to the hustle and…
In an increasingly competitive global economy, productivity matters more than ever before. Organizations are constantly…
Hiring the right talent is crucial for any organization's success, but identifying the perfect fit…
So, you've found yourself in a bind, facing the daunting task of choosing a personal…
This website uses cookies.