For people who find it difficult to get approved for a credit card, secured credit cards are one of the best options to start their credit journey and build their credit score. Secured Credit Cards are cards that are issued against a Fixed Deposit and not on the basis of an individual’s credit score or income. Almost all the major card issuers offer secured credit cards nowadays. You can even get the premium cards like HDFC Regalia against a fixed deposit. If you are also having a secured credit card or you are thinking of getting one, you might be having several questions related to these cards’ credit limit. In this article, we are going to discuss all about what secured credit cards are, how much credit limit they offer, and how can you improve the credit limit of a secured card. Continue reading the article for further information:
All About Secured Credit Cards
As mentioned earlier, Secured credit cards do not require a good credit score or a high income to get approved, but these can be issued to anyone against a fixed deposit. You just need to open a fixed deposit amount with the bank from which you want to get a credit card. This FD amount is used as collateral by the card issuer so that they don’t have to bear any losses in case the cardholder doesn’t pay his/her card’s outstanding balance. However, the FD amount requirement can be different for different secured cards, but you can get a credit card by opening an FD account with as low as Rs. 10,000.
People who have no income source or no credit history can easily get a secured credit card. Secured Credit Cards don’t only offer various rewards and benefits, but you can also build your credit score using these cards and it further helps you in getting an unsecured credit card. Along with failing of the benefits of a credit card, you can keep earning interest on the FD amount that you have deposited in the bank. However, if you fail to pay your credit card bill, the card issuer uses this FD amount against your card’s outstanding balance. Therefore, you should keep in mind that you don’t miss your credit card bill payment ever while using a secured credit card. It will not only impact your credit score badly, but your FD amount will also be gone.
Can You Increase The Credit Limit On Your Secured Credit Card?
The credit limit of a secured credit card is generally equal to or slightly less than the FD amount against which the card has been issued. For example, if you have got a secured credit card against an FD of Rs. 20,000, your credit limit can not be higher than Rs. 20,000. Now, what if you want to increase your credit limit? Is it possible to improve the credit limit of a secured credit card? Though you can’t get the credit limit of a secured card increased simple like that of an unsecured credit card, there are two options to do it:
- The first option is to use your secured card responsible and wait for the card issuer to upgrade your card to an unsecured one. You should use your secured credit card regularly and make the bill payments timely so that your credit score only improves and it doesn’t fall down. Once you build a good credit score, you card issuer may offer you an upgrade to an unsecured credit card where you would surely get a higher credit limit.
- Sometimes, it becomes difficult to get approved for an unsecured card even after using a secured credit card responsibly for a long time. The reason may a low/average income or any other factor, but not every secured credit cardholder gets upgraded to an unsecured card. In such a case, you can get your credit limit increased by increasing the FD amount in the bank.
Best Secured Credit Cards in India
All the popular card issuers, including HDFC Bank, SBI Card, ICICI Bank, Axis Bank, etc offer secured credit cards with different FD requirements and various exclusive features. The following are some of the best secured credit cards in India:
- Kotak 811 #DreamDifferent Credit Card: The 811 #DreamDifferent Credit Card by Kotak Mahindra Bank is one of the most popular secured credit cards in the country. It is a lifetime free card and one can get it by opening an FD account for Rs. 10,000 or more at the Kotak Bank.
- SimplyClick SBI Card: You might have heard of the SBI SimplyClick Credit Card, which is one of the best rewards credit cards in the country. It comes in secured as well as unsecured form and charges an annual fee of Rs. 500 and offers up to 10x Rewards on your spends.
- Flipkart Axis Bank Credit Card: The Axis Bank’s co-branded Flipkart Credit Card can also be issued against a fixed deposit at Axis Bank. It comes with an annual fee of Rs. 500 and is targeted at people who love online shopping and are loyal to Flipkart.
You can check the detailed list here: Best Secured Credit Cards in India 2022
Secured Credit Cards are among the best options when it comes to getting a credit card without a source of income or with a low/no credit score. These cards provide you with all the benefits of unsecured credit cards, but the only thing is that you don’t get a very high credit limit with a secured credit card. The best option here is to use your card responsibly and wait until your card issuer offers you an unsecured card with a higher limit. After using a credit card properly for 6 to 2 month, you can also request the card issuer to improve your credit limit or to upgrade to your secured card to an unsecured one. If you still have any doubts related to the credit limit of secured credit cards, you cam freely ask us in the comment section below!