How secured credit cards can help you build a good credit score?
If you are a young professional or a student, the chances are that your credit history is too insignificant to make any difference to your credit score. This may not affect you if you do not plan to take any loan or credit card in near future, but what if you do.
In that case, it is highly recommended to opt for a secured credit card so that you can build your credit history.
What is a secured credit card?
It is a credit card which is issued against a fixed deposit (FD) of a bank. For instance, IDFC First Wow and Sbi Card Unnati.
What are the key features of secured credit card?
These are some of the key features:
1. You do not need a credit history to get a secured credit card
2. Since this is issued against a lien of fixed deposit, you can choose the credit card’s card limit based on the amount of fixed deposit.
3. As you clear credit card payments on time, you manage to build a credit score. This enables you to apply for a card without any lien against fixed deposit (FD).
4. While you can make the most of your credit card, the deposit you opened with the bank continues to deliver interest.
Some examples of secured credit card
These are some of the examples of secured credit card
I. IDFC First Wow: This is a card for international travel. Cardholders are entitled to earn upto 4X reward points on every transaction. Aside from this, one can earn upto 6.25 percent per annum interest on FD. It also allows you to raise your credit limit by securing an additional fixed deposit starting from ₹5,000.
II. SBI Card Unnati: One can get this card against the lien on cardholder’s deposit with SBI of ₹25,000 or more. There is no fee for first four years.
III. ICICI Bank Instant Platinum Credit Card: This card is issued against an FD of ₹50,000 or higher. There is no joining or annual fee.
IV. Bank of Baroda Prime Credit Card: This is also issued against a fixed deposit (FD) of ₹15,000 or more without any income proof.
Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article is intended to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with risks such as high interest rates and hidden charges. Please consult a certified financial advisor before making any credit decision.
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