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Secured Credit Cards: This Is How Students And Retirees Can Get A Credit Card Without An Annual Income

Secured credit cards are a great option if you’re a student, retiree or someone who’s in between jobs and don’t meet the income requirements for regular credit cards.


Applying for a credit card probably only comes to your mind if you’re currently in the workforce, since there are minimum annual income requirements for most regular credit cards.

Unfortunately, there could be a group of people who still want to enjoy the benefits of using a credit card, but might not quality to apply for one. These could be students, retirees, freelancers, or those whose annual income don’t fulfil the criteria of the card they wish to apply for.

For this group of individuals, there’s another type of credit card that does not require any minimum income to apply. These are known as secured credit cards.

Read Also: 11 Things Working Adults In Singapore Should Know Before Applying For Their First Credit Card

What Is A Secured Credit Card?

A secured credit card requires collateral, usually in the form of a fixed deposit. Banks can offset the debt using the collateral in the event of default, hence it is considered ‘secured’. Currently, the minimum amount of fixed deposit required for secured credit cards in Singapore is $10,000.

The credit limit of a secured credit card is typically the same as the amount for the fixed deposit. This means if you pledge a $10,000 fixed deposit for the credit card, the credit limit will also be $10,000 unless otherwise specified by the bank.

Unsecured credit cards are the most common type of credit card available in the market. The key difference between a secured and an unsecured credit card is the need for collateral. As it is not backed by collateral, a minimum income is required to ensure that users have the financial means to repay the loan borrowed through the credit card.

The credit limit for unsecured credit cards depends on your monthly income. You can also propose a credit limit, which is subjected to approval by the bank.

Who Can Benefit From Secured Credit Cards

#1 Individuals Who Have No Income

The first group consists of mainly students, retirees and unemployed individuals who have no income.  As proof of income is required to apply for an unsecured credit card, this group of individuals will not be eligible for it. Students do have the option to apply for unsecured student credit cards, but these cards typically have a $500 credit limit and limited benefits compared to a normal credit card.

#2 Working Adults Who Do Not Meet The Minimum Income Requirement

This group consists of working adults who fall into either category:

  1. Individuals who earn less than $30,000 per annum
  2. Individuals who earn more than $30,000 per annum but less than the income requirement for a higher income credit card.

For the second category, it refers to selected unsecured credit cards with higher income requirement but also can be applied via the secured credit card route. Examples of such cards are the Bank of China Visa Infinite and HSBC Visa Infinite. Both cards have $120,000 per annum income requirements. Alternatively, $25,000 and $30,000 of fixed deposits will suffice to apply for the respective cards.

#3 Individuals With No Or Bad Credit Score

A person with no or bad credit score may find difficulty getting approval for loans and unsecured credit cards, even if he or she meets the requirements. Getting a secured credit card provides a good opportunity to build or rebuild one’s credit score. This can be done by charging a small amount on a regular basis and paying off the bill on time and in full.

For those who are afraid of missing payments, one way is to set up a GIRO arrangement with the bank for their monthly credit card bill. In this way, there will not be another missed payment. This will help establish a good payment track record with the bank.

Also Read: Guide To Understanding Your Credit Report (And Improving Your Credit Score)

Understand The Purpose Of Applying For A Secured Credit Card

Secured credit cards can be useful alternative if you can’t get access to regular credit cards. But before applying for any credit card, it is important that you’re clear about the purpose of applying for one. Whether it is to rebuild your credit score or to take advantage of credit card rewards, credit cards should put you in a better financial position.

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