Why Most Secured Credit Cards Don’t Offer So Many Rewards & Benefits?

Secured Credit Cards are cards that are issued against a fixed deposit, which is used as collateral by the issuer in case the cardholder defaults on his/her bill payments. These cards are the best option for those who find it challenging to start their credit journey due to a lack of credit history or because of not having a source of income. If you are also planning to get a secured credit card or already have one, you might have observed that secured cards do not have as many benefits as unsecured ones. Some secured cards do offer great benefits, but the required FD amount is high in that case. But with most of the secured credit cards, you do not get very high reward rates and other benefits. To understand why is it so, continue reading the article:

Why Secured Cards Don’t Have So Many Benefits?

Secured Credit Cards so offer benefits, but not as much as the general unsecured credit cards. It is because the secured credit card users are entry-level users and they just want to establish their credit history first. Moreover, card issuers are also not sure about the credit behavior of individuals who do not have a credit history. Until an individual builds a decent credit profile, it becomes difficult for the issuers to offer so many benefits along with their credit card as there are chances that these people may default on payments. But once you build a good credit history using a secured credit card, you can easily get upgraded to another card with higher rewards and better benefits. However, there are many credit cards that offer exciting benefits across different categories, such as the HDFC Regalia Credit Card, HDFC Millennia Credit Card, Flipkart Axis Bank Credit Card, and many more. These cards are issued as secured as well as unsecured cards and are among the most popular credit cards in the Indian market.

Basic Benefits of Secured Credit Cards

It is true that secured credit cards do not have so many benefits, but these cards have some decent advantages as mentioned below:

• Secured Credit Cards generally come with a low joining/annual fee as these cards do not have very premium benefits. These cards are generally super affordable and hence, everyone can easily start their credit journey using them.
• Almost every credit card offers some sort of reward points/cashback on all your spends. However, these reward rates may be very low compared to that of the unsecured cards, but you can save a decent amount with the secured cards as well.
• You can also get several short and long-term offers that help you save on your spends by getting accelerated cashback/rewards or discounts.
• Secured Credit Cards help you build your credit history, which further helps you get approved for better credit cards or loans in the future.

How To Get a Secured Credit Card?

Almost every major credit card issuer offers secured credit cards these days. You can easily get a secured credit card by opening a fixed deposit account in the respective bank. The required FD amount is generally a minimum of Rs. 10,000 to Rs. 20,000 for most of card issuers. However, for premium cards like HDFC Regalia, this can be higher as well. You can get s secured credit card online as well as offline at your convenience. To apply for it online, just visit the official website of the card issuer and find an option to apply for the card of your choice. If you find any difficulty, you can also contact the respective bank’s credit card customer care and request them o help you out with the application process. Just fill in all the required details carefully and submit the application form. If you have opened an FD account with that issuer, there is a high chance that your application will be approved.

If you want to apply for your card offline, you can also do that by visiting the nearest branch of the respective bank. Just open an FD account there and then apply for the card by filling in the physical application form. Make sure to carry all the necessary documents along with you, such as identity proof, address proof, FD account details, etc.

Bottom Line

Secured Credit Cards might have lesser benefits, but these cards are the best option to start your credit journey with. No bank/card issuer easily approves your credit application until you have a decent income and a good credit history, but secured cards do not have any such requirements. You can easily get a card just by opening a fixed deposit account. So, instead of looking for so many benefits, you must focus on building your credit history first and then you can easily get a card with exclusive privileges. If you have any further doubts in your mind, feel free to comment them down!