Boost Your Credit Score with Secured Credit Cards: A Complete Guide!

Struggling with poor or no credit history? A secured credit card could be your solution!

1. What is a Secured Credit Card?

  • A secured credit card is linked to a Fixed Deposit (FD) with the issuing bank.
  • Credit limit: Usually 80%-100% of the FD amount.
  • Easier approval: Ideal for individuals with poor or no credit history.

2. Benefits of Secured Credit Cards:

  • Credit Score Improvement: Timely payments can boost your credit score.
  • Easy Approval: No high credit score or income proof required.
  • Earn Interest: FD continues to earn interest while you use the card.
  • Controlled Spending: Credit limit is linked to the FD, preventing overspending.
  • Global Acceptance: Use it like any regular credit card worldwide.

3. Secured vs. Unsecured Credit Cards:

Feature Secured Credit Card Unsecured Credit Card
Approval Criteria Requires an FD Based on income & credit score
Credit Limit Linked to FD amount Based on income & history
Interest on Deposit Yes, FD earns interest Not applicable
Credit Score Required Low or none Good credit score required
Rewards & Benefits Similar to regular cards Often better benefits
Upgrade Option Can be upgraded to unsecured Not applicable

4. Key Considerations:

  • Timely Payments: Always pay dues on time to improve your credit score.
  • Credit Utilisation: Keep utilisation low for a positive impact on creditworthiness.
  • Fees & Charges: Be aware of annual fees, late payment penalties, etc.

Pro Tip:
Use your secured card responsibly to build your credit score. Over time, you may qualify for an upgrade to an unsecured card with better rewards and benefits.