A secured credit card is a great option if you are looking to build a credit history.
Things we covered for you
+
In this blog, you’ll learn everything you need to know about secured credit cards in India. Discover the benefits, features, and best options available, as well as how to apply, build credit, and more.
Understanding Secured Credit Cards
If you’re new to the concept of secured credit cards, here’s what you need to know–
What is a Secured Credit Card?
A secured credit card is a type of credit card that requires a deposit as collateral. This deposit typically becomes the credit limit for the secured credit card in India. Unlike unsecured credit cards, secured credit cards are easier to obtain and can help build credit.
How does a secured credit card Work?
To get a secured credit card, the issuer would require you to put down a deposit. The credit limit of your secured credit card would be equal to this deposit amount. This helps you obtain a credit card easily since the issuer has a lower risk of unpaid dues on the secured credit card.
Benefits of Using a Secured Credit Card in India
Secured credit cards offer several benefits in India, including helping you establish credit, providing a credit limit that can be increased over time, and offering rewards programs. They are ideal for those who have no credit history, bad credit, or have trouble obtaining traditional credit cards.
Features to Consider When Choosing a Secured Credit Card
1. Credit Limit and Collateral Requirements for Secured Credit Card
The credit limit and collateral requirements of a secured credit card vary depending on the issuer. Some cards require a minimum deposit of ₹ 5,000, while others may require a higher amount. It’s important to consider the deposit required and how it will impact your credit limit.
2. Secured Credit Card Interest Rates and Fees
Secured credit cards typically have higher interest rates and fees than traditional credit cards. It’s important to compare interest rates, annual fees, and other fees before choosing a secured credit card.
3. Rewards and Cashback Programs
Some secured credit cards offer rewards and cashback programs. These programs can help you earn points, cashback, or other rewards that can be redeemed for merchandise, travel, or other benefits.
Read: ELSS vs PPF: Which of these Tax Saving Investments Should You Choose?
Book Best Packers & Movers with Best Price, Free Cancellation, Dedicated Move Manager
This is third
This is third
This is fourth
This is fourth
This is fifth
This is fifth
This is six
This is six
This is seven
This is seven
This is eight
This is eight
4. Credit Building and Reporting Features
Many secured credit cards offer credit building and reporting features. These features can help you establish or rebuild your credit by reporting your on-time payments to credit bureaus.
How to Apply for a Secured Credit Card in India?
If you’re looking to apply for a secured credit card, follow these steps.
1. Eligibility Criteria and Required Documents
To apply for a secured credit card in India, you must meet the issuer’s eligibility criteria and provide the required documents, such as proof of identity, address, and income.
2. Application Process and Timeline
The application process for a secured credit card in India is similar to that of a traditional credit card. It typically involves filling out an online or paper application and providing the required documents. The timeline for approval varies depending on the issuer.
Tips for Getting Approved for a Secured Credit Card
To increase your chances of getting qualified for a secured credit card in India, it’s important to choose an issuer that fits your needs, provide accurate and complete information on your application, and maintain good credit habits.
- Understand the eligibility criteria: Before you apply for a secured credit card, make sure you understand the eligibility criteria. Check the minimum age, minimum income, and other requirements set by the bank or credit card issuer.
- Maintain a good credit score: Even though a secured credit card is designed for individuals with poor or no credit history, having a good credit score can increase your chances of getting approved. Make sure you pay your bills on time, maintain a low credit utilisation ratio, and keep a healthy credit history.
- Apply for the right type of secured credit card: Different banks and credit card issuers offer different types of secured credit cards. Look for a card that matches your financial needs and credit profile.
- Choose a high deposit amount: The deposit amount is the collateral for your secured credit card. Choosing a higher deposit amount can increase your chances of getting approved and also give you a higher credit limit.
- Provide accurate and complete information: Make sure you provide accurate and complete information in your application. Any errors or incomplete information could lead to your application being rejected.
- Maintain a savings account with the bank: Some banks may require you to maintain a savings account with them to be eligible for a secured credit card. Having a savings account with the bank and maintaining a good relationship with them can increase your chances of getting approved.
- Show proof of steady income: Banks and credit card issuers want to ensure that you have a steady source of income to repay the credit card bills. Providing proof of steady income can increase your chances of getting approved.
- Keep your debt-to-income ratio low: Banks and credit card issuers calculate your debt-to-income ratio to determine your ability to repay the credit card bills. Keeping your debt-to-income ratio low can increase your chances of getting approved.
- Have a stable employment history: Having a stable employment history can increase your chances of getting approved for a secured credit card. Banks and credit card issuers prefer individuals who have a stable source of income.
- Apply with a co-signer: If you are unable to meet the eligibility criteria or have a poor credit history, applying for a secured credit card with a co-signer can increase your chances of getting approved. The co-signer’s credit history and income will also be taken into consideration.
[widget_homeLoan_checkEligibility_form]
Read: RuPay Credit Card: Keeping Your Payments Secure While Keeping The Indian Flag Flying High
What to Do if Your Application Is Denied
If your application for a secured credit card is denied, you can contact the issuer to find out why and how you can improve your chances of approval in the future.
Comparing the Best Secured Credit Cards in India
| CREDIT CARD | FEATURES | BENEFITS |
| Axis Bank ACE Credit Card | Quick cashback benefits on all purchases.EMI conversion option on all purchases above ₹2500. | Up to 20% discount across their 4000+ restaurant partners across India.Up to 4% cashback on Zomato, Swiggy and Ola.Domestic airport lounge access four times a year.5% cashback on mobile recharge, utility bills and DTH service bills paid via Google Pay.2% cashback on all purchase transactions. 1% waiver on fuel surcharge at all petrol pumps on transactions between ₹400- ₹4000. |
| Axis Insta Easy Credit Card | Up to 100% of your credit limit can be withdrawn.Obtain a credit limit that is 80% of what you have in a fixed deposit.Get rid of up to 1% fuel surcharge. | Save 15% when dining out.You can turn transactions exceeding ₹ 2,500 into EMIs. |
| Bank of Baroda Prime Credit Card | This credit card has no annual charge.Purchases over ₹ 2,500 can be made as EMIs.Receive up to three complimentary lifetime add-on cards for your partner, parents, siblings, or children above the age of 18.Get credit without interest for 50 days from the purchase date. | Get four reward points for every ₹100 you spend.For purchases between ₹ 400 and ₹ 5,000, all Indian fuel stations waive the 1% fuel surcharge.Protect the financial future of your family with free personal accidental death insurance.Reward points can be exchanged for cash or other goods and services. |
| Flipkart Axis Bank Credit Card | Purchases over ₹ 2,500 can be paid as EMIs.Get rewards for joining and activation valued ₹ 1,100. | Receive a 1% fuel surcharge waiver at any gas station in India when you spend between ₹ 400 and ₹ 4,000.Get 4% cashback on some other hand picked merchants and 5% cashback on Myntra and Flipkart.Receive a 50% discount on your first Swiggy purchase up to ₹ 100.Four domestic airport lounges are accessible for free each year.Get up to a 20% discount at selected restaurants in India with Axis Bank Dining Delights. |
| IDBI Bank Imperium Platinum Credit Card | More than 29 million establishments globally, including 900,000 Indian businesses, accept this credit card.Enjoy an interest-free credit period of up to 48 days for your purchases, and arrange your payments as you see fit.Take advantage of add-on cards for your parents, spouse, siblings, or kids who are at least 18 years old.You can withdraw up to 70% of your credit limit. | As a welcome bonus, receive 500 delight points.Every ₹150 you spend on entertainment, travel, shopping, etc., earns you 2 delight points.Making a single transaction of at least ₹1500 within 30 days of card issuance will get you free delight points.You can block your credit card if it is lost or stolen by getting in touch with IDBI Bank customer service.Take advantage of special discounts on hotels, vehicle rentals, airport shopping, and more. |
| Kotak Mahindra Bank 811 #DreamDifferent Credit Card | Withdraw money for up to 48 days without being charged interest.Move any unpaid credit card balances from other banks’ credit cards to your 811 #DreamDifferent credit card. | For every ₹100 you spend on online shopping, you will receive 2 reward points.For every ₹100 you spend on other purchases, you’ll receive 1 reward point.If your credit card is stolen, you are protected up to 7 days before reporting for fraudulent use up to ₹50,000.For purchases between ₹500 and ₹3,000, all Indian gas stations waive the 1% fuel surcharge.When you activate your card and spend ₹5000 during the first 45 days, you’ll receive 500 bonus reward points.Receive a 1.8% railway surcharge waiver for transactions made on irctc.co.in and a 2.5% railway surcharge waiver for Indian Railways ticketing counter transactions. |
| SBI Advantage Plus Card | Cardholders with extended credit are able to pay the minimum due each month and roll over the unpaid balance at a low interest rate of 2.25% per month.The maximum cash withdrawal is equal to the credit limit.Includes the “Easy Money” feature. This makes it possible for cardholders to have a demand draught or a check delivered to their registered address.For a little processing cost, cardholders can transfer credit from other credit cards.Cardholders are instantly qualified for an Encash facility of either ₹ 25,000 or ₹ 50,000. | Can be used at one million or more ATMs that accept Visa or MasterCard worldwide.EMIs can be created from transactions by using the Flexipay option. |
| SBI ELITE Credit Card | Suitable for use in 3.25 lakh outlets in India, among the more than 24 million outlets available worldwide.There are add-on cards available for partners, parents, kids, and siblings who are at least 18 years old.The ability to replace cards is available worldwide.Obtain a free liability insurance policy for credit card fraud worth ₹ 1 lakh. | At every Indian gas station, you can save up to 1% on fuel on all transactions between ₹ 500 and ₹ 4,000.Get a ₹ 5,000 gift card as a welcome present.Spend money at department stores, restaurants, and grocery stores to earn 5 times as many reward points.For every ₹ 100 spent on goods other than petrol, you will receive 2 reward points.Get a year’s worth of free movie tickets worth ₹ 6,000.Receive access to six international airport lounges annually and two domestic airport lounges every three months.Take advantage of 50,000 bonus points each year, valued ₹ 12,500.When you spend ₹ 3 lakh or ₹ 4 lakh annually, you will receive 10,000 bonus reward points. |
| SBI Prime Credit Card | Almost 24 million merchants worldwide accept this credit card, including 3.25 lakh in India.There are emergency card replacement services available worldwide.There are add-on cards available for partners, parents, kids, and siblings who are at least 18 years old.Around a million ATMs that accept Visa, MasterCard, and American Express are available worldwide.Pay your utility bills by utilising the “Easy Bill Pay” feature.Get a ₹ 1 lakh credit card fraud liability cover. | Get an e-gift card from any of our partner brands worth ₹ 3,000 as a welcome gift.On your birthday, earn 20 reward points for every ₹ 100 you spend.For every ₹ 100 you spend on restaurants, grocery, movies, and department stores, you’ll receive 10 reward points.Receive yearly access to eight domestic airport lounges and four overseas airport lounges.Receive a free Silver membership to Club Vistara.Spend ₹ 3 lakh in a year and receive a waiver of the annual charge. |
| SBI SimplyCLICK Credit Card | Suitable for use in 3.25 lakh outlets in India, among the more than 24 million outlets available worldwide.Get add-on cards for your partner, parents, and older children or siblings.Pay your utility bills by utilising the “Easy Bill Pay” feature.Transferring unpaid balances from credit cards from other banks to your SimplyCLICK SBI Card will allow you to pay them off in lowered-interest EMIs. | Earn 10x more reward points when you shop online at sites like Lenskart, BookMyShow, and Amazon.After paying the annual charge of ₹ 499 plus taxes, take advantage of a gift card worth ₹ 500.If you spend ₹ 1 lakh in a year, the annual fee is reversed.For purchases between ₹ 500 and ₹ 3,000, all Indian fuel stations waive the 1% fuel surcharge.For spending between ₹ 1 lakh and ₹ 2 lakh in a year, receive an e-voucher worth ₹ 2,000. |
| SBI SimplySAVE Credit Card | Almost 24 million merchants globally, including 3.25 lakh in India, accept this credit card.There are add-on cards available for partners, parents, kids, and siblings who are at least 18 years old.Pay your utility bills by utilising the “Simple Bill Pay” feature. | Get ₹ 100 back as a welcome bonus when you make your first ATM cash withdrawal within 30 days of receiving your card.For every ₹ 150 you spend with your SBI SimplySAVE credit card, you receive 1 reward point.Get 2,000 reward points when you spend ₹ 2,000 or more within 60 days of getting your card.If you spent ₹ 1 lakh or more in the previous year, the annual charge is waived.Earn 10x reward points for every ₹ 150 you spend at restaurants, movie theatres, and department stores.Receive a 1% fuel surcharge waiver at all Indian gas stations when you spend between ₹ 500 and ₹ 3,000. |
| SBI Unnati Credit Card | This card is issued against a fixed deposit of more than Rs.25,000.There are 3.25 lakh stores in India among the 24 million outlets worldwide that accept this credit card.You can purchase add-on cards for your parents, spouse, siblings, or kids who are at least 18 years old.Transferring unpaid balances from credit cards from other banks to your SBI Unnati card will allow you to pay them off in lowered interest-rate EMIs.Pay your utility bills by utilising the “Easy Bill Pay” feature. | For the first four years, there is no annual charge for this credit card.Spend ₹ 100 and receive 1 reward point.For annual spending of ₹ 50,000 or more, receive a cashback of ₹ 500.For purchases between ₹ 500 and ₹ 3,000, all Indian petrol stations waive the 1% fuel surcharge. |
| Yes Prosperity Rewards Plus | Card Protection Plan to protect you against card fraud, theft, loss or emergencies. Credit Shield coverage to protect in case of accidental death of primary card holder.Instant EMI option to convert purchases into EMIs. | Get special deals in a variety of categories, including food, travel, shopping, and wellness.For purchases between ₹ 400 and ₹ 5,000, all Indian fuel stations waive the 1% fuel surcharge.For every ₹ 200 you spend in certain categories, you’ll receive 2 reward points.With the exception of some categories, you can earn 4 reward points for every ₹ 200 you spend.Get 12,000 bonus points for every ₹ 3.6 lakh you spend in a year.Get a 3.50% decrease in the foreign currency markup cost. |
Building Credit with a Secured Credit Card
A secured credit card can be an effective tool to build credit history, especially for those who have no or limited credit history. When you use a secured credit card, the credit card issuer reports your credit activity to the credit bureaus. By making timely payments, you can improve your credit score gradually.
Tips for Using a Secured Credit Card
Here are some tips for using a secured credit card to improve your credit score:
- Keep credit utilisation low: Use the card for small purchases and keep the utilisation below 30% of the credit limit.
- Pay on time: Set up automatic payments or reminders to pay the bill on time.
- Upgrade to an unsecured credit card: After using a secured credit card for some time, the issuer may allow upgrading to an unsecured credit card with a higher credit limit.
- Review credit reports: Regularly review the credit report for errors and dispute them if any.
Common Mistakes Made When Using A Secured Card
While using a secured credit card can help build credit, there are also some common mistakes you should avoid, such as carrying a high balance, missing payments, and closing the account too soon.
How Long Does It Take To See Improvements In Credit Score?
It may take several months or even years to see significant improvements in your credit score.
However, if you use your secured credit card responsibly, you can establish a positive credit history and eventually qualify for unsecured credit cards with better terms and higher credit limits.
Alternatives to Secured Credit Cards in India
While secured credit cards can be a helpful tool in building credit, there are other options available in India. Here are a few alternatives to secured credit cards:
- No-fee secured credit card options: Some credit card issuers may offer secured credit cards with no annual fee or lower interest rates, making them a more affordable option.
- Other credit building options in India: You can also build credit history by taking out a personal loan, making timely payments on utility bills and rent, or becoming an authorised user on someone else’s credit card.
It’s important to consider the pros and cons of each credit building option and choose the one that suits your needs and financial situation the best.
Advantages and Disadvantages Of Different Credit-Building Methods
Each credit-building method has its own advantages and disadvantages. Personal loans can be helpful for building credit, but they can also come with high interest rates.
Becoming an authorised user on someone else’s credit card can be easy, but it can also be risky if the primary cardholder doesn’t make payments on time.
Overall, a secured credit card is a great option for those looking to build credit in India.
However, there are other options available if you prefer not to use a secured credit card. It’s important to carefully consider your options and choose the method that works best for your financial situation and goals.
A secured credit card can be a great tool for building credit in India, especially if you don’t have a strong credit history. By putting down a security deposit, you can start using credit and establish a positive credit history over time.
If you’re not interested in a secured credit card, there are other options available for building credit in India, such as personal loans and becoming an authorised user on someone else’s credit card.
No matter which method you choose, the most important thing is to make payments on time and use credit responsibly. This will help you establish a positive credit history and improve your credit score over time.
NoBroker, offers a range of financial services, including home loan assistance to help you navigate the complex world of credit and achieve your financial goals and make your dream home a reality.
Head over to NoBroker Home Loan Services to check your eligibility today!
FAQ’s
Q1. What is the difference between a secured credit card and an unsecured credit card?
Ans. A secured credit card requires collateral to be provided as a guarantee of payment, while an unsecured credit card does not require any collateral. Secured credit cards are generally easier to obtain for those with poor credit or no credit history.
Q2. Can using a secured credit card help improve my credit score?
Ans. Yes, using a secured credit card responsibly and making timely payments can help improve your credit score over time. This is because using a secured credit card can help establish a positive credit history, which is a key factor in determining your credit score.
Q3. What happens if I am unable to make payments on my secured credit card?
Ans. If you are unable to make payments on your secured credit card, the issuer may take possession of the collateral that was provided as security for the card. This could include seizing funds from a linked bank account or holding on to a deposit made to secure the card.
Q4. How long does it typically take to see improvements in my credit score when using a secured credit card?
Ans. It can take several months to see improvements in your credit score when using a secured credit card. This is because credit bureaus typically update credit reports once per month, so it may take some time for your positive payment history to be reflected in your credit score.
Q5. What are some alternatives to using a secured credit card to build credit?
Ans. Other options for building credit include taking out a credit builder loan, becoming an authorised user on someone else’s credit card, or using a rent reporting service to have your on-time rent payments reported to credit bureaus. It’s important to research these options and choose the one that best fits your financial situation and goals.
