A credit card is one of those ubiquitous modern technologies that refuses to go away. Indeed, it has become so ubiquitous in our life that we require one to hire a car, book a hotel room, or even purchase a comic book online. Credit cards are also one of the ways creditors check our credit history, and they can make or break our chances of getting a good loan, an apartment, or a job. So, what do we do if we’ve shredded our credit? Secured HDFC credit cards are what we use.
Secured credit cards are an excellent alternative to traditional credit cards. A secured credit card can help you re-build or establish your credit, whether you have bad credit that needs to be repaired, can’t get a credit card, or are new to the credit scene.
Table of Contents
How does it function?
Credit cards provide you with a line of credit that you can use for purchases, debt transfers, and/or cash advances, with the requirement that you repay the loan amount over time. When using a credit card, you must make at least the minimum payment on the debt each month by the due date.
Where a secured credit card combines the features of a credit card and a debit card. It necessitates the placement of funds in an account as collateral. This amount serves as your credit limit. So, if you put 50000 in your account, you can only use your secured credit card to buy things up to 50000. The catch is that you must repay it.
Some banks will give you more credit as a reward for being a good customer (paying your bills on time) or enable you to charge up to a specific percentage higher than your deposit amount. To cover such type of consumption, you simply need to pay a minimal interest rate.
What is the required minimum deposit?
Most secured credit cards need a deposit of 25000 or more, depending on the type of card you choose and the banking institution. There are no restrictions on how much you can contribute later.
What to Look for When Choosing a Secured Credit Card
Secured credit cards have higher rates and yearly fees than unsecured credit cards. If you’re looking for a secured card, look for one that doesn’t charge an application fee. You’ll have to pay an annual fee, so pick a safe card that doesn’t demand an exorbitant premium.
Keep an eye out for secured credit card agreements that include hidden costs or unnecessary add-ons. For instance, a credit card provider might approve your secured card application if you agree to sign up for a monthly insurance coverage.
What is the best place to apply for a secured credit card?
Although not all banks provide secured credit cards, you can still inquire about them at your local bank to see if they are still available. Check with your credit unions, as many of them only issue these cards to their members.
Building credit with secured credit cards
While most banks market secured credit cards to people who have never had credit before, many people use them to rebuild their credit. To do so, users only need to utilise their protected cards and make sure their bills are paid on time each month. The consumer establishes positive credit by demonstrating their dependability.
Secured credit cards’ prospects
Many people still prefer secured credit cards, but they are increasingly switching to unsecured cards. Unprotected cards don’t work. They are appealing in part because they do not require monetary collateral. A secured credit card is still the best credit card option for few selective people, especially for those who are currently building or trying to rehabilitate their credit.
Read Also: Preclosure in your Axis Bank Personal Loan
