Secured vs Unsecured Credit Cards in India: Which Should You Get?

Last reviewed: October 2026

If you've been rejected for a credit card, or you're applying for your first one, the answer may be a secured credit card. This guide explains how secured and unsecured cards differ, what each costs, and which one is right for you.

What is a secured credit card?

A secured credit card is issued against a fixed deposit (FD). The FD acts as security, so the bank takes very little risk, and that's why these cards are easier to get even with no or a low credit score.

• Credit limit: typically 75–90% of your FD. Some issuers offer up to 100%.
• Income proof: usually not required.
• Your FD keeps earning interest, but it's under the bank's lien while the card is active. You can't break it without closing the card.
• If you don't pay, the bank can recover the dues from your FD.

What is an unsecured credit card?

An unsecured card is a regular credit card. It needs no deposit. The bank approves it based on your credit score, income and existing debts. Most cards in India, from entry-level cashback cards to premium travel cards, are unsecured.

Secured vs unsecured: side-by-side

Common myth: "Secured cards have lower interest." Not necessarily. Many FD-backed cards charge interest similar to regular cards (example comparison), so paying in full matters just as much. Check the card's MITC.

Pros and cons of secured cards

Pros

• Easy approval, even with no or a poor credit history
• Builds your credit score when you pay on time
• Many are lifetime-free
• Your FD keeps earning interest

Cons

• Your money is locked in the FD
• The limit is capped by your deposit
• Rewards are usually modest

Pros and cons of unsecured cards

Pros

• No money locked away
• Higher limits as your profile improves
• Better rewards, travel and lifestyle benefits

Cons

• Harder to get without a credit history
• Premium cards come with annual fees

Which one should you choose?

• Choose a secured card if you're new to credit, a student, self-employed without income documents, or rebuilding a low credit score.
• Choose an unsecured card if you have a good credit score and stable income. Use our guide on how to choose the right credit card.

How to move from a secured to an unsecured card

1. Use under 30% of your limit.
2. Pay the full bill on time every month. Autopay helps.
3. After 6–12 months, check your credit score.
4. Ask your bank about an upgrade, or apply for an unsecured card.
5. Close the secured card only once the new card is active, so the FD lien is released.

Popular FD-backed options include the IDFC FIRST WOW Credit Card and the Kotak 811 #DreamDifferent Credit Card. Check the current minimum FD and fees on the bank's site.

The bottom line

A secured card is the easiest way to start or rebuild your credit. Pay in full every month, and within a year you could qualify for a regular card with better rewards.

Next step: Compare FD-backed and lifetime-free cards on PaisaSimple →

Related reads: Student credit cards · Avoid the minimum due trap

Sources

• RBI Master Direction – Credit & Debit Cards (2022, amended)
• IDFC FIRST WOW!
• Kotak 811 DreamDifferent

Disclaimer: This article is for general information only and is not financial advice. Card terms are set by the issuer and can change. Check the latest Key Fact Statement and terms on the issuer's official website before applying.

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