Credit cards are one of the most useful financial tools that serve multiple purpose. It not only helps in boosting an individual's purchasing power but also helps them maximize their savings. Secured credit cards are a type of credit card which are backed by fixed deposits made by the cardholder.
The cash deposit is considered as collateral against the credit account. Such credit cards are often used to improve a poor or non-existing credit history. People who have limited credit history can avail this kind of credit cards, before becoming eligible to own a traditional credit card.
There are certain features and advantages of a secured credit card. They are-
- Easier application and approval procedure.
- Interest can be earned on the cash deposited as collateral.
- The deposit is used by the issuer only if you fail to pay the credit card bills. Secured credit cards also come with high security similar to its traditional counterparts like Bajaj Finserv RBL Bank SuperCard.
A credit card secured with a fixed deposit needs to be used wisely if an individual is to avail all the benefits. Some of the ways to do so are-
- Making small purchases to remain within the credit limit.
- Pay the credit card bills timely and above the minimum requirement.
- Enrolling in an auto-pay facility. This prevents a cardholder from missing deadlines and having to pay penalty charges.
Individuals having a credit score within 580-670 can qualify for a secured credit card. With proper usage of this credit card, he/she can eventually be able to avail a traditional credit card.
0 Comments