The term credit card usually refers to the ‘unsecured’ category of cards where no collateral is pledged. However, there are ‘secured’ credit cards in the market as well, which are offered against fixed deposits. Paisabazaar Step Up Credit Card is one such option. Secured cards are suited for those who wish to build or improve their credit score but are not eligible for unsecured credit cards. Here is all you need to know about what a secured credit card is and how it works.
|On this page|
What is a Secured Credit Card?
Secured credit cards work a lot like normal credit cards. The primary difference is that a secured credit card is provided against collateral, such as fixed deposits to lower the risk level for card issuers.
Secured credit cards are beneficial for people who have no or bad credit history. Therefore, it is one of the easiest ways to improve your credit score while availing the benefits of a credit card. These cards are offered against a fixed deposit which reduces the risk for credit card issuers. However, if you don’t pay your bill on time, the credit card issuer can take the money from your deposit.