Why should you consider a Secured Credit Card?

In finance, being aware of your credit alternatives is essential. Among the various credit alternatives, a Secured Credit Card is a beneficial option, particularly for people trying to start over or repair their credit score.

Secured Credit Cards, as opposed to regular Unsecured Credit Cards, provide a different perspective on credit, which can be helpful for a variety of people, including newly independent young adults and those getting over financial hardships.

In this blog, we will explore the features, functions and benefits of a Secured Credit Card. 

What is a Secured Credit Card? 

It is a type of Credit Card that requires cash deposit from the customer. This payment serves as a security for the Card and usually establishes the credit limit. The available credit limit of a Secured Credit Card is often equal to the deposit amount, preventing cardholders from going over and above their spending limits.

Compared to Unsecured Credit Cards, which are not secured and dependent only on the credit history of the cardholder, Secured Credit Cards are very different. For people who don't have a good enough credit history or a low credit score to qualify for regular Credit Cards, Secured Credit Cards are the best fit. Cardholders reduce the risk for the issuer by offering collateral, which enables the application process.

How a Secured Credit Card works

A Secured Credit Card is usually approved if you keep something as a collateral, such as FDs. This deposit will be used as security by the card issuer if you don't carry out your payments. You can use the card in the same way as any other Credit Card to make payments and purchases. By paying your bills on time, you can create or rebuild your credit history. You may be allowed to switch to an unsecured card if you make sensible use of a secured card. It's a wise decision if you want to improve your credit score and have access to better financing possibilities.

How to apply for a Secured Credit Card

You can apply for an ICICI Bank Secured Credit Card through online and offline methods.

To apply online, follow the steps below:

• Visit the official ICICI Bank website and select ‘Cards’. From the drop-down menu, choose ‘Credit Card’
• Choose the card that suits your needs, in this case a secured card and click on ‘Apply Now’
• Complete the application. Since this is a Secured Credit Card, you may be required to submit personal information and identification documentation
• Once authorised, make good use of the card to establish credit.

How to build credit with a Secured Credit Card

Building credit with a Secured Credit Card is very simple if you follow these steps:

• Start by using the card for everyday purchases and paying off the balance in full each month. It demonstrates responsible credit use and helps improve your credit score over time
• Ensure your expenses are within your credit limit and always make payments on time
• Monitoring your credit report regularly can help track your progress
• With consistent use and timely payments, you can establish a positive credit history. Some secured cards may even offer the opportunity to upgrade to an unsecured card as your credit improves.

Benefits of a Secured Credit Card

In comparison to Unsecured Credit Cards, Secured Credit Cards are easier to obtain (even those with poor or no credit scores can obtain the Card), as the security deposit lowers the issuer's risk.

Improving one's credit score is a major benefit of the Secured Credit Card. Credit Bureaus receive reports of timely payments carried out by the cardholder and low credit utilisation ratios, which gradually raise credit scores.

Additionally, compared to cash or Debit Cards, the Secured Credit Card provides a safer option for purchases. A level of protection that cash cannot match is provided by the cardholder's immunity from liability for unauthorised transactions, in the event of a theft or loss.

To further increase the usefulness of the Card, several issuers may reward practical usage by raising the credit limit without requiring a new deposit. These Cards can also be used for regular spends, which would help the cardholders to manage their money and establish credit.

Selecting the best Secured Credit Card

The Instant Platinum Chip Credit Card and Coral Credit Card against FD from ICICI Bank offer unique benefits. The Instant Platinum Chip Credit Card is a great choice for those who are seeking a basic, secure Card, while the Coral Credit Card is perfect for individuals who enjoy rewards and luxuries.

By choosing the right Card, ICICI Bank customers can make their financial transactions more rewarding as per their lifestyle.

ICICI Bank Instant Platinum Chip Credit Card

• Fees: No joining or annual fees
  Lifetime free access
  Easy online application.
• Eligibility: Anyone who can open an FD Account with a minimum amount of ₹ <50,000> can avail this Credit Card.
• Benefits: Enhanced security with a Platinum Chip, flexible spends and credit building.
• ICICI Bank Coral Credit Card against FD
• Rewards: Earn points on every purchase, redeemable for various benefits.
• Point accumulation: 2 points per ₹ 100, excluding fuel and 1 point per ₹ 100 on utilities and insurance.
• Milestone Programme: Earn up to 10,000 points annually on high spends.
• Benefits: Redeem points for gadgets, appliances and luxury items; enhances your lifestyle through rewarding shopping experiences.

Careful thought must go into choosing the best Secured Credit Card. Look for Credit Cards that offer various Reward Programmes, competitive interest rates and affordable fees. Choosing a Card that would provide the best value for your needs can be done by comparing different cards available to you.

Conclusion

Secured Credit Cards provide a route to better financial health with perks like quick acceptance and credit building potential. Do your research, evaluate your options and then choose a Secured Credit Card that best fits your budget.