When you’re looking for a low CIBIL score credit card without previous experience in handling credit, your choices may be more limited. You can use the following credit cards to build your credit score before switching to a traditional credit card:
- Secured credit cards
- Credit cards with a guarantor
- Unsecured credit cards with higher fees
Among these options, secured credit cards are the most popular and with good reason. Such a card can help you build your positive credit history and improve your CIBIL score over time.
What is a Secured Credit Card?
To opt for the services this card provides, you will have to put up your fixed deposit as collateral. The issuer will assess your deposit and issue a credit card. The card’s limit is typically based on the deposit amount.
Using this card responsibly and paying your dues on time will help you improve your credit score. When applying for a secured credit card to compensate for a low CIBIL score, consider the following factors:
- Eligibility criteria: The eligibility criteria for a secured card are easy to meet as your chances of approval are high thanks to the FD
- Credit Score: While applying, you will not be required to have a certain credit score; however, you can start building it once you use your credit card
- Credit Limit: Issuers may sanction a credit limit ranging from 80% to 90% of your fixed deposit amount
- Interest on Fixed Deposit: While you use the credit card limit, your fixed deposit continues to earn interest, so you can increase your savings
Why Use a Secured Credit Card
These cards can be a smart choice if you’re looking to build credit or need an alternative to traditional cards. Here are some key benefits you can consider:
- Helps build or rebuild credit with timely payments and low credit utilisation
- Easier approval even with poor or no credit history due to collateral
- Establishes positive credit history, aiding future loan and unsecured card approvals
- Potential for credit limit increases with responsible usage, improving credit score
- Usable for everyday purchases, paying bills and easy EMI conversion while building creditworthiness
- Offers security against unauthorised charges if lost or stolen
How to Apply for a Secured Credit Card
Applying for this card is usually much simpler than applying for a traditional one. Here is how you can do so:
- Find and compare secured credit cards and their features
- Go to the issuer’s website
- Find the application form and fill it in to apply for the credit card
- Set up a fixed deposit
- Submit your details and documents
- Complete the verification process
- Wait for approval, which should be quick
- Get your credit card (on approval)
- Activate your credit card
5 Best Secured Credit Card Suggestions
It is important to find the best option for yourself when applying for a low CIBIL score credit card. Here are a few cards you can consider:
IDFC FIRST Wow Credit Card
This is a lifetime-free credit card, which can help you improve your credit and get the benefits of a credit card. This credit card is a good pick as it has features like 4X points and 300+ offers at partner retailers. At the same time, your fixed deposit can grow at a 7.25% interest rate.
BOBCARD PRIME
You can get this credit card with zero joining and annual fees and build your credit score efficiently. It gives you built-in insurance coverage with smart EMI options. It offers 2 reward points for every ₹100 spent and provides a 1% fuel surcharge waiver, too.
One Credit Card
This credit card is lifetime-free, meaning it comes with no joining or annual charges. It has numerous benefits, including 5X reward points on your top two spending categories. However, the excitement doesn’t end there, as you can get valueback and rewards on a wide change of purchases at partner retailers.
SBI Unnati Card
This is another helpful card that you can get with an FD of ₹25,000 or more. It has an annual fee of ₹499. However, you don’t have to pay it for the first 4 years. With this card, you will get 1 reward point for every ₹100 spent. If your annual spending exceeds ₹50,000, you will receive ₹500 cashback within the next few days. You can also enjoy a fuel surcharge waiver.
Kotak 811 #DreamDifferent Credit Card
This is another lifetime-free credit card with no joining or annual charges. It offers 90% of the fixed deposit amount as your credit limit. You can get 1 to 4 reward points for every ₹100 spent. You can also withdraw 90% of the credit limit as your cash advance. Moreover, it offers discounts on IRCTC bookings and has a 1% fuel surcharge waiver as well.
To select the best card, you will have to compare their various benefits and costs. Having said that, going for a lifetime-free credit card while choosing your secured credit card is a better option. Lifetime-free credit cards such as the One Credit Card will help you maximise your savings while enjoying the card’s benefits.
The One Credit Card comes with a powerful app which makes it easier to pay your bills on time. The best feature is getting 100% of the FD amount as your credit limit. Simultaneously, you will earn more with an interest rate of up to 7.50% on your FD. Download the app or visit the website and apply now.
