The need and use of credit cards have increased rapidly in the last few years. Many times when you have to make an important purchase, but the bank balance is low, then you can purchase with the help of a credit card. The good thing is that there is a grace period to repay the amount spent from the credit card, if you return the money within that period, then you do not have to pay even a rupee of interest. Apart from this, many rewards, offers, and discounts are also available on credit cards. Due to all these features, it has become increasingly popular.

But the amount spent on the credit card is a kind of loan. In such a situation, when banks issue a credit card to a customer, they first check his credit score so that it can be known how the person's loan repayment history has been. Many times banks can also refuse to give credit cards to those with a poor credit score because banks do not consider it trustworthy. If something like this has happened to you too, then you can apply to the bank for a secured credit card. No matter what your credit score is, the bank will approve it immediately.

What is a secured credit card?

As the name of the secured credit card itself suggests, it is a card that is given in exchange for a collateral deposit. This card is given in exchange for a fixed deposit, which means that to get this card, it is necessary to have your FD in the bank. The limit of most secured cards is kept up to 85 percent of the FD. As long as the customer's FD remains in the bank, the card user can use this credit card.

But if the credit card bill is not paid by the secured credit card user by the stipulated time for any reason, then the bank has the right to recover its loan by encashing his fixed deposit account. A secured credit card is a better option for those people whose credit card request is rejected by the bank for some reason. Secured credit cards do not offer discounts, offers, rewards, etc. like regular credit cards, but still, it is very beneficial in many ways.

Benefits of a Secured Credit Card

- You can improve your bad credit score by making timely bill payments. This card helps in generating credit history. This can improve the possibility of getting a loan or credit card in the future.

- The limit of the card depends on the amount of your FD. The higher the FD amount, the better the limit of the card.

- Its interest rates are lower than regular credit cards because it is given in exchange for FD. The annual maintenance charge for secured cards is also less.

- It is easy to get approval as it is given in exchange for a collateral deposit. A bad credit score does not make any difference to it. For this, you do not have to provide proof of annual income.

- By taking a credit card against FD, the cardholder gets the option of increasing his credit limit without any extra cost along with receiving interest on the fixed deposit account.

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