Comparison Between Secured & Unsecured Credit Cards

The use of plastic money has increased for the last few years. Lending institutions have also been working hard to provide a variety of credit cards to fulfil the various needs of customers. So, if you’re looking for a credit card, it’s critical to understand not just the many credit cards offered by banks, but also the different sorts of credit cards. Secured credit cards and unsecured credit cards are the two types of credit cards available.

It may come as a surprise to those who are unaware that there is such a thing as a secured credit card because the general perception of credit cards is that they do not require any form of collateral, which is correct; even secured credit cards do not require any form of collateral to be provided as a mortgage. However, banks cannot just provide credit cards to everyone who applies. And denying applications from new borrowers with no credit history is not the greatest option either. In light of this, banks have issued secured credit cards to a large number of applicants who have a weak or no credit history.

Difference Between Secured and Unsecured Credit Card

If you pay your monthly bills on time, one of the many benefits of using a credit card is that it improves your credit score faster than any other credit product. Such as a personal loan or a home loan. Furthermore, it is true that a strong credit score is required to obtain a credit card with better perks and incentives. To address these two issues at the same time, secured credit cards are issued.

  1. When an applicant is required to pay a specified amount of money. As a security deposit in order to obtain a secured credit card. For example, before being awarded a credit card, an applicant must present Rs. 15,000 in cash. This sum paid to the bank to obtain a credit card serves as a security deposit. Which is used to repay the loan as a last resort if the person fails to make monthly payments. In the event of an unsecured credit card or a regular card. The cardholder does not have to pay a security deposit to the bank.
  2. Another significant distinction between secured and unsecured credit cards is that the credit limit on an unsecured credit card can range from 70% to 100% of the security deposit. This limit is set based on the creditworthiness of the person in question, as determined by the bank. Because there is no security deposit with an unsecured credit card. The question of determining credit limit on that basis does not arise. The credit limit for unsecured cards is determined based on the applicant’s credit history and current EMIs.


If your credit score is low and you want to raise it, getting the best credit cards in India is a good alternative. Furthermore, if you have no credit history at all, getting a credit card. Specifically a secured credit card, for a short length of time. Such as 9 months to a year, is a viable choice. Your credit score will improve if you pay off your monthly bills on schedule.

Read Also:- What are the Interest Needed for Gold Loan to Secure it Without Burden

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