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Credit card is also a kind of loan. The only convenience is that you are given a grace period to repay this loan in which you do not have to pay any kind of interest. This is the reason why the use of credit card is increasing rapidly in today's time. Although credit cards are very easily available these days. But if your CIBIL score is very poor, then the bank can hesitate to give you a credit card or can also refuse outright because in such cases the bank sees the risk of loan default.

If something like this is happening to you too, then there is no need to worry. In this situation, you can apply for a Secured Credit Card. This option will be useful to you despite a poor CIBIL score and the bank will approve your application immediately. Know what a Secured Credit Card is and what are its benefits.

What is a Secured Credit Card?

As the name of Secured Credit Card itself suggests, it is a card that is given in exchange for collateral deposit. This card is given in exchange for fixed deposit, which means that to get this card, it is necessary to have your FD in the bank. The limit of most Secured Cards is kept up to 85% of the FD. As long as the customer's FD remains in the bank, the card user can use this credit card.

But if the credit card bill is not paid by the secured credit card user by the stipulated time for any reason, then the bank has the right to recover its loan by encashing his fixed deposit account. Secured credit card is a better option for those people whose credit card request is rejected by the bank for some reason.

Benefits of secured credit card

- Secured credit card does not offer discounts, offers, rewards etc. like regular credit cards, but still it is very beneficial in many ways. Know the benefits of secured credit card here-

- By making timely bill payments, you can improve your bad credit score through this. This card helps in generating credit history. This can improve the possibility of loan or credit card in future.

- The limit of the card depends on the amount of your FD. The higher the FD amount, the better will be the limit of the card.

- Its interest rates are lower than regular credit cards because it is given against FD. The annual maintenance charge for secured cards is also less.

- It is easy to get approval as it is given against collateral deposit. Bad credit score does not affect it. For this, you do not have to provide proof of annual income.

- By taking a credit card against FD, the card holder gets the option of increasing his credit limit without any extra cost along with getting interest on the fixed deposit account.