Secured credit card: THESE are the 5 key advantages. Should you opt for it?

A secured credit card is a type of credit card that requires a refundable security deposit which is equal or more than the credit limit. It’s a feasible option for those who are new to credit or trying to rebuild a poor credit score.

Several banks in India offer secured cards against fixed deposits (FDs). These include SBI Advantage Plus Card, ICICI Bank Coral Credit Card Against FD and Axis Bank Insta Easy Card.

Here we explain several advantages of a secured credit card and whether one should consider applying for it.
Advantages of a Secured Credit Card

I. It helps build or rebuild credit: Most secured credit cards report to all major credit bureaus. When a user makes timely payments and maintain low utilisation, it can positively impact his credit score. Getting approval for secured credit card is very easy.

II. Easy approval: Securing approval for secured credit card is usually easier than with unsecured cards, even if you have no credit history or a low score. This is because income requirements are often more relaxed.

III. Spending is controlled: Your credit limit is typically equal to your deposit, which prevents overspending. Therefore, it is good for learning how to manage credit responsibly.

IV. Path to an unsecured card: Some issuers automatically upgrade you to an unsecured card after several months of responsible use. You get your security deposit refunded upon upgrade or account closure (if the balance is paid off).

V. Just as regular cards: This card provides same protections just as regular card and includes fraud protection, dispute resolution, and in some cases, rewards or cashback (depending on the card).
Should you opt for a secured credit card

I. Technically, you should go for it if you have no credit history or a low/bad credit score. You are a student, a young professional, or someone who was previously denied unsecured cards.

2. You are committed to paying bills on time and using credit wisely.3. But you should avoid if you already qualify for a good unsecured card with rewards. You cannot afford to lock in the deposit amount (usually ₹5,000– ₹25,000 or more). You’re not planning to use it responsibly—it won’t help your credit score if misused.