Decoding Secured Credit Cards

What is a Secured Credit Cards?

A secured card offers perks similar to a standard credit card. However, it comes with one key difference — you need to make a security deposit. Note that the amount you deposit is your credit limit as well. This deposit serves as collateral for the issuing bank. For instance, if you provide a deposit of AED 10,000, your card’s spending limit will be AED 10,000.

This system reduces the bank’s risk, making it easier to get secured cards even when you have no credit history or a low score. Secured cards, as mentioned earlier, are similar to regular cards. You can use them for online shopping, in-store payments, bill settlements, and travel bookings. Most importantly, responsibly using a secured card helps you build a positive credit record, which is reported to the al etihad credit bureau (AECB).

Some key Features of the Best Secured CC Include —

• Approval with Deposit: Your chances of rejection are minimal if you can provide the required collateral
• Credit-building opportunity: Efficiently using the card and repaying bills on time helps build your credit Score
• Global acceptance: Like unsecured cards, secured cards are accepted worldwide
• Upgrade potential: With consistent and timely payments, banks may eventually convert your secured card into a regular unsecured credit card

How to Use Your Secured CC Wisely?

While secured cards are great for rebuilding your credit score, how you use them determines their effectiveness. Know some top hacks for using these cards properly 

Don’t Skip Payments

Your payment history majorly builds your credit score. Paying off bills related to your card and other utilities on or before the due date is essential. Keep a note that even one missed payment can negatively impact your progress.

Keep Credit Utilisation Low

Remember, just because your card limit matches your deposit doesn’t mean you should spend the entire amount. Try to keep your spending below 30–40% of your available limit. This shows you as financially disciplined.

Monitor Your Credit Report

Keep a track of your AECB credit report regularly. It can help you track improvements and ensure all card activities are being reported correctly. 

In a Nutshell

The best secured credit card helps you establish or rebuild your credit history. By requiring a security deposit, this type of card minimises risk for banks. Whether you are new to the country, someone recovering from financial setbacks, or simply creating your credit profile, a secured card can help you get started.