As secured credit cards are issued against collateral in the form of fixed deposits, it reduces the credit risk of banks. In case a credit card holder fails to repay his card bill, the bank has the liberty to liquidate fixed deposits to recover outstanding dues. Banks offer secured credit cards against fixed deposits as collateral. Sahil Arora, Director, Paisabazaar. Just like regular credit cards, transactions made through secured credit cards are reported to the credit bureaus.
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