Looking for a credit card but don’t have a good credit score or any credit history at all? No worries! Secured credit cards are here to help you build your credit score from scratch or rebuild it if things haven’t been perfect. Imagine them as training wheels on your first bike—they help you balance until you’re ready to ride on your own.
These cards require you to put down a fixed deposit as collateral, but in exchange, they offer you a line of credit that you can use just like a regular credit card. If you play your cards right, you can improve your credit score and eventually move on to unsecured credit cards with better benefits. Let’s explore some of the best-secured credit cards available in India for 2024.
Why Secured Credit Cards Are Worth Considering
Secured credit cards can be a financial lifeline if you’re just starting out or trying to bounce back from past credit mistakes. Here are a few reasons why they might be a great option for you:
- Easy to Get: Banks are more likely to approve your application since you’re backing it with a fixed deposit. It’s like a safety net for them.
- Credit Building Opportunity: By making timely payments, you can steadily build or improve your credit score, paving the way for future financial opportunities.
- Peace of Mind: Because the card is secured by your own money (the FD), you don’t have to worry about getting into unmanageable debt. Think of it as a built-in stopgap.
Top Secured Credit Cards in India for 2024
We’re here to help you discover the best secured FD-based credit cards in India. These cards, which are issued against a fixed deposit (FD), offer a great way to build or improve your credit score while enjoying various benefits. In this guide, we’ll provide you with a comprehensive list of the top secured credit cards, along with their unique features, benefits, and other essential details to help you make an informed decision.
| Credit Card | Joining Fee |
|---|---|
| Axis Bank ACE Credit Card | Rs. 499 + GST |
| HDFC Bank Millennia Credit Card | Rs. 1,000 + GST |
| SBI SimplySAVE UPI Rupay Credit Card | Rs. 500 + GST |
| ICICI Bank Coral Credit Card | Rs. 500 + GST |
| SBI SimplyCLICK Credit Card | Rs. 499 + GST |
| AU Nomo Credit Card | Rs. 199 + GST |
| ICICI Bank Platinum Chip Credit Card | Nil |
| SBI Prime Credit Card | Rs. 2,999 + GST |
| HDFC Bank MoneyBack Plus Credit Card | Rs. 500 + GST |
| YES Prosperity Rewards Plus/ACE Credit Card | Rs. 399 + GST |
| Flipkart Axis Bank Credit Card | Rs. 500 + GST |
| Magnet FD Backed Credit Card | Nil |
| IDFC FIRST WoW Credit Card | Nil |
| Bank of Baroda Prime Credit Card | Nil |
| OneCard Metal Credit Card | Nil |
Key Features and Benefits of Secured Credit Cards
Secured credit cards offer several features that make them an attractive option for new and rebuilding credit users:
- Reward Programs: Most secured cards offer rewards in the form of points or cashback, providing added value to cardholders.
- Credit Limit: The credit limit is typically 80-85% of the FD amount, providing sufficient flexibility while ensuring the issuer’s security.
- Easy Application Process: With minimal documentation required, the application process for secured credit cards is straightforward and quick.
- Additional Perks: Many secured credit cards come with additional benefits such as fuel surcharge waivers, discounts on dining and travel, and zero liability protection on lost cards.
How Do Secured Credit Cards Work?
Think of a secured credit card as having a foot in the door of the credit world. You put down a fixed deposit, which acts as collateral. This deposit determines your credit limit—usually about 80-90% of the FD amount. It’s like a game of give and take: you give a little (your deposit) and take a little (your credit limit). As long as you’re making timely payments and keeping your spending in check, you’re well on your way to boosting that credit score!
Now, this isn’t some financial jail sentence. Use the card like you would any other credit card—shop online, buy groceries, pay for gas. The key is to make sure you’re paying off your balance in full each month to avoid interest charges. And voilà, you’re on the path to a healthier credit score!
Choosing the Right Secured Credit Card for You
It’s easy to feel overwhelmed with so many options, but don’t worry—choosing the right secured credit card is all about finding one that aligns with your lifestyle and financial goals. Here are some things to consider:
- Rewards and Benefits: Some cards offer cashback or reward points on every purchase, which can add up over time. It’s like getting a little thank-you gift from your card issuer every time you use your card.
- Fees: Look out for joining fees and annual fees. While some cards come with no fees, others might have a small charge. Make sure the benefits outweigh the costs.
- Credit Limit: The higher the fixed deposit, the higher the credit limit. Decide how much you’re comfortable locking away in an FD. Remember, the goal is to spend wisely, not max out your credit limit.
- Ease of Application: Some banks make it super easy to apply online with minimal documentation. Others might require a trip to the bank. Choose a card that matches your convenience.
Tips for Using Your Secured Credit Card Wisely
- Keep Your Spending in Check: Remember, this is about building credit, not splurging. Keep your expenses within 30% of your credit limit to show that you’re responsible with credit.
- Pay Your Bills on Time: It might seem like a no-brainer, but paying your bill on time is important. Late payments can hurt your credit score and lead to interest charges. Set reminders or automate payments if needed. You can pay your bill using one of the 6 Best Credit Card Bill Payment Apps in India.
- Monitor Your Credit Score: Keep an eye on your credit score to see how your responsible behavior is paying off. It’s like watching your own little garden of credit grow.
- Upgrade When Ready: Once you’ve built up a solid credit score, consider upgrading to an unsecured credit card with better rewards and benefits. It’s like graduating from a bicycle to a motorcycle—you’re ready for more speed and freedom!
Eligibility Criteria for Secured Credit Cards
Unlike unsecured credit cards, secured credit cards have more lenient eligibility criteria. Most banks require applicants to:
- Be at least 18 years old (some banks may have a minimum age of 21).
- Have a fixed deposit with the issuing bank, which will serve as collateral.
- Provide basic KYC documents, such as proof of identity, address, and income (if applicable).
There are generally no strict income requirements for secured credit cards since the FD provides security for the issuer.
How to Apply for a Secured Credit Card
Applying for a secured credit card can be done either online or offline:
- Online Application: Visit the bank’s website, choose the secured credit card option, fill out the application form, and submit the required documents.
- Offline Application: Visit the nearest branch of the issuing bank, open a fixed deposit account, and apply for the secured credit card by filling out the necessary forms.
After submitting your application and completing the FD, the bank will review your documents and process the application. Once approved, the credit card will be issued and sent to your registered address.
Pros and Cons of Secured Credit Cards
Pros:
- No Income Proof Required: You can apply for a secured credit card without needing to show proof of income.
- No Credit History Needed: These cards are available to individuals with no prior credit history, making them ideal for first-time credit users.
- Build Credit Score: Regular use and timely payments help build or improve your credit score.
- Rewards and Benefits: Many secured cards offer attractive rewards programs and other benefits like cashback and discounts.
Cons:
- Lower Credit Limits: The credit limit is generally restricted to 80-85% of the FD amount, which might not be sufficient for some users.
- Higher Interest Rates: Secured credit cards may have higher interest rates compared to unsecured cards.
- Collateral Requirement: You need to have a fixed deposit with the bank, which can limit accessibility for some users.
Final Thoughts
Secured credit cards are like a second chance in the credit world, offering a way to build trust with banks and creditors. Whether you’re just starting out on your financial journey or looking to rebuild after a setback, these cards can be an invaluable tool. The key is to use them responsibly—make timely payments, keep your spending in check, and watch your credit score improve. Before you know it, you’ll be riding high on the credit highway, ready for whatever financial opportunities come your way.
Got a story about how a secured credit card helped you build your credit? Share it in the comments! Let’s learn from each other and make 2024 the year we all get a little closer to our financial goals.
FAQ
What is a secured credit card?
A secured credit card requires a security deposit, which acts as collateral and determines your credit limit. This type of card is designed for individuals looking to build or rebuild their credit.
How does a secured credit card help build credit?
By using your secured credit card responsibly—making timely payments and keeping your balance low—you can improve your credit score over time. Most secured credit cards report to major credit bureaus, which helps build your credit history.
What happens to my security deposit?
Your security deposit is held by the bank as collateral. If you close your account in good standing or upgrade to an unsecured card, the deposit is typically refunded to you.
Can I increase my credit limit on a secured credit card?
Yes, you can increase your credit limit by adding more funds to your security deposit. The credit limit is generally based on the amount of the deposit.
Are secured credit cards easy to get?
Yes, secured credit cards are generally easier to obtain than unsecured cards because they require a security deposit, which minimizes risk for the issuer. This makes them accessible to individuals with poor or no credit history.
Can I convert my secured credit card to an unsecured one?
Many banks allow you to convert your secured credit card to an unsecured card after demonstrating responsible use over a period of time. This typically involves timely payments and maintaining a good credit score.
