If you do not have a good credit score or are new to credit cards, getting a secured credit card could be ideal. Secured credit cards are issued by the financial institutions against collateral such as Fixed Deposits (FDs) and savings bank accounts. This article takes you through all the details of a secured credit card, its benefits, how to apply for it and the best-secured credit cards. Read on!
A secured credit card requires cardholders to pay a specific sum as collateral and is especially issued to those with no credit history. The amount paid as collateral becomes the maximum credit limit. Banks or financial institutions issue such cards against investments like FDs or even savings account deposits.
While some consider secured credit cards as expensive ways to get credit, people looking to build their credit score from scratch may find it beneficial. This increases their chances of receiving loans. Here’s a list of benefits of a secured credit card:
Here’s a list of the best-secured credit cards in India:
There are two ways to apply for a secured credit card – offline and online.
For the online procedure, follow these steps:
To apply for a secured credit card offline, follow these steps:
Secured credit cards offer the same reward points and other benefits that unsecured cards provide. It is easier to get a secured credit card if you have a low credit score and also improve your credit score by using a secured credit card. However, keep in mind that you have to pledge collateral to a secured credit card.
Ans: Secured credit cards help build one’s credit score from scratch. The credit report records your payment details and the investment you’ve made in the form of collateral. In addition, on-time payments help improve the score.
Ans: There are no limitations for holding and using secured credit cards. The duration depends on the time one requires to qualify for a normal credit card.
Ans: The credit limit for a secured credit card depends on the deposited amount kept as collateral with the bank that issues the card. Users can contact bank representatives to expand their credit limits.
Before you go…
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.