How To Build Your Credit Score Without A Credit Card

Top Benefits Of Using A Secured Credit Card

What is a secured credit card: Feature, benefits & how it works

A lot of folks want to get a new credit card, and why not? If used smartly, it not only simplifies your purchases but also helps earn rewards and benefits on your spending.

So what holds you back from applying for a credit card? The fact is, few of you may find it challenging to get approval for a new credit card. This could be down to poor or non-existent credit history.

While there are plenty of credit cards out there, most of them have certain eligibility criteria that may be hard to meet. But there is a more than viable solution here - secured credit cards like the  Dream Different Credit Card. Easy to get, backed by a fixed deposit, and just as rewarding as an unsecured credit card. Oh! and by the way, they help improve credit scores too.

But the question still stands. Are the benefits of a secured credit card truly really good enough to get one for yourself? Well of course they are! Let's get into the crux of what secured credit cards are and explore their benefits.

What is a secured credit card and does it build credit score?

A secured credit card is issued against a security deposit by the issuing company. For instance, a fixed deposit powers the Kotak811 #DreamDifferent Credit Card. This deposit or FD (as low as Rs. 5000) acts as collateral. The Kotak811 Dream Different Credit Card offers up to 90% of the FD amount as the credit limit. Now to better understand how it helps you build your credit score, let's discuss some of the features of the best-secured credit cards for you.

Is a secured credit card right for me?

It is the most important question you should ask. And the answer is yes!  If you want to start building your credit score without the need for regular income, you can surely consider getting a secured credit card for yourself. 

What are the benefits of secured credit cards?

Secured credit cards like the Kotak811 Dream Different Credit Card offer many advantages while helping you simplify your purchases. Let's take a look.

Reap the benefits of a secured credit card 

  • No credit score is required for qualification
  • Your FD amount determines your credit limit
  • Earn higher interest on your FD
  • Offers and rewards are similar to those of a regular credit card
  • It helps boost your credit score with timely payments
  • Makes you eligible to get a regular credit card
  • You can improve credit limit with responsible card use

Reasons why you need a secured credit card

Though conventional credit cards have been a game-changer and dominated the market for a long time, secured cards are trending in the right direction. Consumers have become more aware of the benefits and easy eligibility criteria. With a secured credit card, you can:

Build credit

Getting a secured credit card opens up an account with credit bureaus—Equifax, TransUnion, CIBIL, and Experian. As you make timely payments, these accounts showcase your repayment history, thus improving your credit score.

Avoid interest fees

If you follow one simple rule, you can avoid interest rates on your card altogether. It is simply to pay your credit card bill before the due date. If you keep doing so, you will not only evade the high-interest rate but also get your credit score to improve in the long run.

Features of a secured credit card

A secured credit card is backed by a deposit or an FD. This deposit serves the purpose of a collateral for your account and offers an assurance to your credit card provider in the event of repayment difficulties or failure on your part. 

Though secured credit cards carry several benefits for users, many people are still confused about getting one. Let's have a look:

Annual percentage rate

The yearly interest rate, known as the annual percentage rate (APR), is the amount you will be charged if you maintain an outstanding balance on your credit card. Certain credit cards possess fluctuating APRs, indicating that your rate may increase or decrease as time progresses.

The biggest benefit of a secured credit card is that they have a lower APR than their unsecured counterparts, making it a preferable option.

Aid in the transition to an unsecured credit card

The main benefit of getting a secured credit card is that it helps you build a credit score or improve it. In turn, a good credit score increases trustworthiness and banks consider you eligible for an unsecured credit card.

Get your Zero Balance Account at home with the new Video KYC zero contact process.

How does a secured credit card work?

When people hear about secured credit cards, the most common question is, how does a secured credit card work? A secured credit card involves the cardholder maintaining a deposit with the issuing institution to safeguard against potential payment defaults.

These cards are common for people with little to no credit history, or even a poor history as they help improve credit scores and help transition to an unsecured one.

Top advantages of using a secured credit card

Though the advantages of using a credit card are plenty, it is compounded by how a secured credit card works. These cards have been a game changer and have helped people boost their credit scores faster and build credit history. The main advantages of a secured credit card are:

Credit cards 'credit' you with rewards

Completing transactions with a credit card is simple, but it doesn’t end with you just paying your monthly bill. These cards make sure you get back some of what you give. Credit card companies repay card owners by partnering with different businesses to incentivise and improve their card experience. This is done through benefits, such as loyalty points, rebates, price reductions, cashbacks, free products, surcharge waivers, and so much more.

Earns interest

One of the biggest advantages of using a secured credit card is the interest you earn from the fixed deposit account. If the card is used well, and all the bills are paid on time, the FD remains intact and keeps earning interest. 

This keeps your credit utilisation in check and helps you boost your credit score.


If you are looking to get a credit card but are not eligible, you sure could try getting a secured credit card. Practising good credit management can raise the ceiling on your credit profile, get you awesome rewards, earn you interest on your deposit, and help you become eligible for other credit cards and even better loan offers. So what’s the hang up? Apply Now for a lifetime free secured credit card with no hidden fees! Be different, dream different with Kotak811.

Popular Searches on Kotak811

Zero Balance Account Opening Online | Kotak811 | Kotak811 Insights | 811 Edge Savings Account | Free Digital Bank Savings Account | Apply for Image Debit Card | Check Your CIBIL Score | Online Savings Account

This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.