Secured Credit Cards: Everything You Should Know Before Applying

🔹 Introduction

Secured credit cards are becoming a go-to option for people who want to build or rebuild their credit score in a structured and low-risk manner. Whether you're a young professional with no credit history, a student, or someone seeking to improve a poor credit score, this financial tool can provide access to improved financial health.

🧩 What is a secured credit card, and how does it work?

A secured credit card is a type of credit card that is backed by a cash deposit from the cardholder. This deposit acts as collateral and typically also sets the credit limit for the card. For example, if you deposit ₹10,000, your credit limit will likely be ₹10,000 or slightly less.

How it works:

• You deposit a fixed amount in a bank account (usually as an FD).

• The bank issues a credit card with a limit equal to or slightly less than the deposit.

• You use the card like any other, and timely payments build your credit history.

Key Features:

• Helps in credit score building

• Safer for banks, hence easier to get approved

• Usually requires a minimum deposit
  

👥 Who Should Apply for a Secured Credit Card?

This card is ideal for:

• First-time card users with no credit history

• Credit rebuilders: people with a bad or low CIBIL score

• Students & freelancers who don’t have fixed salaries

• New-to-credit (NTC) users

🚫 Not Ideal For:

• Those looking for high-reward programs

• People unwilling to park a fixed deposit
  

💸 What is the minimum deposit required for a secured credit card?

Most banks in India ask for a minimum FD of ₹10,000 to ₹25,000. However, this can vary.

Bank	Min Deposit
HDFC Bank	₹10,000
ICICI Bank	₹20,000
SBI	₹25,000
Axis Bank	₹15,000
OneCard	₹5,000 (via SBM)

Note: These amounts are subject to change based on bank policies.

📏 How is the credit limit decided?

Credit limits are usually 75% to 100% of your fixed deposit value. Depending on your repayment history, some premium cards even permit a higher utilization.

Deposit Amount	Probable Credit Limit
₹10,000	₹7,500–₹10,000
₹50,000	₹37,500–₹50,000

Your repayment history and the bank's discretion can adjust the credit limit over time.

📈 Can using a secured credit card help you build or rebuild your credit score??

Absolutely! Timely payments and responsible usage of a secured card are reported to credit bureaus like CIBIL, Experian, and CRIF High Mark.

🔑 Tips to Improve Score:

• Use less than 30% of your credit limit

• Pay full dues before due date

• Don’t default or delay EMIs

Over 6–12 months, users can often see a 50–100 point increase in their credit score.

💰 What are the fees and charges for secured credit cards?

Although secured credit cards typically have low fees, there may still be additional costs involved.

Type	Range
Joining Fee	₹0–₹500
Annual Fee	₹0–₹1,000
Late Payment Fee	₹100–₹600
Over-limit Fee	2.5%–3% of amount

Tip: Opt for a lifetime-free secured card if available.

📋 Eligibility Criteria for Secured Credit Cards

Most banks do not require a credit score or high income, but the following are commonly needed:

• Age: 18+

• Indian citizenship

• Valid PAN and Aadhaar card

• Fixed Deposit with the issuing bank

Do you have any salary slips? No problem. Your FD acts as your guarantee.

🔄 How Does a Secured Credit Card Differ from an Unsecured Credit Card?

Feature	Secured Card	Unsecured Card
Backed by FD	Yes	No
Credit History Needed	No	Usually, yes.
Approval Chance	High	Depends on score
Credit Limit	Based on FD	Based on profile
Risk to Bank	Low	Higher
Rewards	Fewer	More

🏦 Which Banks in India Offer Secured Credit Cards?

Top banks offering these cards:

• HDFC Bank—Easy EMI Card

• SBI—SBI Advantage Plus Card

• ICICI Bank – Coral Card (FD-backed)

• IDFC FIRST Bank – WOW Credit Card

• OneCard—Secured via SBM

💼 What Happens to My Security Deposit If I Default or Close the Card?

Your security deposit (usually an FD) acts as collateral, which the bank can liquidate if you:

• Default on payments, or

• Fail to clear your dues even after reminders

🧾 In Case of Closure:

• You must pay off all outstanding balances

• Once cleared, your FD is released (along with interest, if applicable)

• Some banks deduct charges like closure fees or interest penalties

Important: Always confirm with the bank about FD lock-in periods and card closure procedures to avoid losing money.

⬆️ Can I Upgrade from a Secured Credit Card to a Regular Credit Card?

Yes, you can!

✳️ Criteria for Upgrade:

• Consistent, timely payments for 6–12 months

• Good usage behavior (keeping credit utilization <30%)

• Improved CIBIL score (above 700 generally preferred)

Once eligible, you may:

• Get a limit increase

• Be offered an unsecured card without any deposit

• Retain your credit history and score buildup
  

🎁 Do Secured Credit Cards Offer Rewards or Cashback?

While not as feature-rich as premium cards, many secured cards still offer perks such as

Feature	Availability
Cashback on spends	✅ (e.g., fuel, shopping)
Reward Points	✅ (points-based systems)
Lounge Access	❌ Rare
EMI Options	✅ on eligible purchases
Fuel Surcharge Waiver	✅ often included

Popular Cards with Rewards:

• OneCard Secured—1% cashback

• ICICI FD Card—Payback points

• HDFC EasyEMI Card—EMI + cashback
  

🖥️ How Do I Apply for a Secured Credit Card Online?

Step-by-Step Process:

1. Visit the official website of your bank.

2. Navigate to Credit Cards > Secured/FDC-backed Cards

3. Select the card and click on ‘Apply Now.’

4. Enter basic personal and KYC details.

5. Open an FD account digitally (if not already done)

6. Get approval within 24–72 hours

7. Card is dispatched or added to your app (e.g., OneCard)
   

🔐 Documents Required:

• PAN card

• Aadhaar card

• Passport-size photograph

• Bank account (with the issuing bank)
  

🔐 FD-Backed Credit Cards: What Are They?

An FD-backed credit card is a secured card issued against a fixed deposit, just like a traditional secured card.

It allows banks to:

• Approve cards without checking credit history

• Secure their risk through the FD

• Offer cards with competitive limits

These are often ideal for students, homemakers, or new earners.

🔍 How Does a Credit Card Against FD Work?

When you open an FD, the bank holds it as collateral and issues a card. You:

• Continue earning interest on your FD

• You can use the credit card like any other card

• You must pay dues by the due date; otherwise, your FD may be broken

Example:

If the fixed deposit (FD) is ₹50,000, then the card limit will be ₹45,000, and the FD will continue to earn approximately 6.5% interest; however, if there is a default on payment, the bank will utilize the FD.

💹 What is the minimum FD amount required?

Bank	Minimum FD for Credit Card
HDFC Bank	₹10,000
ICICI Bank	₹20,000
SBI	₹25,000
Axis Bank	₹15,000
OneCard (via SBM)	₹5,000

This can vary depending on the card type, bank policy, and your profile.

💳 What is the credit limit for a credit card secured by a fixed deposit?

Typically, the credit limit ranges from 75% to 90% of the FD amount. Some fintech cards, like OneCard, offer 100% of the FD value.

FD Amount	Credit Limit
₹10,000	₹7,500–₹9,000
₹50,000	₹37,500–₹45,000
₹100,000	₹75,000–₹90,000

🌟 What Are the Benefits of a Credit Card Against FD?

• Approval without credit score

• FD continues earning interest

• Build or rebuild your credit score

• Upgrade path to unsecured card

• Easy online application

Great for:

• New earners

• Housewives

• Retired individuals

• Freelancers

⚠️ What Happens to My FD If I Default on the Credit Card?

The bank may:

• Break your FD prematurely to recover dues

• Charge penalty interest

• Report your default to credit bureaus (impacting your score)

It’s always better to maintain on-time payments.

📋 Are There Annual Fees or Hidden Charges?

Some cards are lifetime free, while others charge annual/renewal fees. Always read the T&Cs.

Bank/Card	Annual Fee
OneCard Secured	₹0
HDFC EasyEMI	₹500
ICICI Coral (FD)	₹500–₹750
SBI Advantage	₹499–₹1,000

Also look for:

• Late payment charges

• Over-limit fees

• Cash withdrawal fees

❓ FAQs

1. Can I apply with no credit history?

Yes! That’s one of the biggest benefits. These cards cater to individuals who are new to credit.

2. Is interest earned on the FD?

Yes. Your FD continues to earn regular interest during the card tenure.

3. Can I increase my credit limit later?

Yes. Either increase the FD amount or upgrade to an unsecured card over time.

4. Are these cards usable internationally?

Most major banks allow international usage with minor forex charges.

5. Which banks offer FD-backed credit cards?

• HDFC Bank

• ICICI Bank

• IDFC FIRST Bank

• OneCard (SBM Bank)

• IndusInd Bank
  

6. How do I close my FD-backed card and get my FD back?

• Pay off dues

• Request card closure

• The bank releases the FD (along with interest if not prematurely broken)
  

🧾 Conclusion

Secured and FD-backed credit cards are powerful financial tools for those starting or restarting their credit journey. With minimal risk and many benefits, they’re a great stepping stone toward full financial inclusion.

Whether you’re looking to build your CIBIL score, earn rewards, or simply learn responsible credit behavior—these cards offer you confidence, convenience, and control.