Scroll Top

search-icon
    drop-arrow

    Secured Credit Card

    What Is a Secured Credit Card?

    A secured credit card is a kind of credit card backed up by the cardholder's cash deposit. This deposit serves as an insurance or collateral, providing security for the card issuer if the cardholder is unable to make payments.

    Secured credit cards are generally issued to borrowers with sub-prime or minimal credit history. Such borrowers are also called thin-file borrowers. Secured cards help the borrowers boost their credit profile through regular reporting to credit reporting agencies.

    Breaking Down Secured Credit Cards

    Most of the credit cards issued are generally unsecured. Your ability to pay off the accumulated balance, the money that you owe to the credit card company, is neither assured nor secured. You agree to pay your balance either in full or instalments every month as per the contract with your lender.

    However, you don't have to put up any of your assets or income as collateral to back the agreement. That is one reason why interest rates on such credit cards are so high — an unsecured debt is always riskier than secured debt. The high-interest rates are to make up for the lack of security, such as in the case of a home or car loan.

    In the case of secured credit cards, you are generally required to back the deal with your credit card company with some sort of collateral or security.

    When you apply for secured credit cards, your credit score and credit history are scrutinised by the card issuer through a hard review with any of the credit reporting agencies. Once your credit reports have been assessed, the credit-issuing company then determines the amount you will be required to deposit to open the account, and a new line of credit will be extended.

    Popular Topics

    Latest Articles

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption