Getting an FD credit card can be a boon if you don’t meet the eligibility criteria of a traditional credit card. The functionality is similar to a regular credit card, and you get the perks of a ‘buy now and pay later’ facility.
These cards also generally don’t compromise on the other perks and benefits associated with the regular ones. There are several other advantages attached to a secured credit card.
However, a few conditions exist to get such a credit card. By knowing more about them and how to use the card to your advantage, you can have a better picture.
Understanding Credit Card Against FD
Many financial institutions have a provision of secured cards. As the name suggest, you can pledge your fixed deposit amount against getting a credit card. You enjoy higher chances of approval since you provide a security.
In the case of a regular credit card, the financial institution doesn’t have any security against giving credit. Thus, the eligibility terms are stricter. In this case, the credit card company
can recoup the amount in case of payment failure.
How Does a Credit Card Against FD Work
To obtain a credit card against an FD, you must first have a fixed deposit with the bank. The credit limit usually depends on the fixed deposit amount. It varies from 75% to 90% of your fixed deposit’s value, depending on a range of factors.
You can make online as well as offline payments using the card. The financial institution sends you the card statement at the end of the billing cycle. Just like a regular credit card, you need to pay off the dues before the due date. After the due date, you have to pay the interest on the outstanding billing amount.
Upon failing to pay the bills multiple times, the financial institution can liquidate your fixed deposit account to recover the outstanding bills.
Advantages of Getting a Credit Card Against FD
Credit cards against fixed deposits have a wide range of perks and benefits. For example, such cards have lower interest rates in comparison to traditional credit cards. If you pay just the minimum due, this feature can come in handy.
These credit cards may have fewer rewards in comparison to traditional cards, but there are some perks you can enjoy. You can get points or cashback depending on the financial institution. You can also redeem those points across various purchases or to pay bills.
Apart from that, there are several other perks like:
Lenient Eligibility Criteria: Unlike a traditional credit card, you can get a fixed deposit credit card without meeting strict criteria. These include:
- Income stability
- Optimal credit score
- Established occupation
These can be suitable if you:
- Are in college or studying
- Have unstable or seasonal income
- Are a homemaker or just entering the workforce
Opportunity to Improve Creditworthiness: A secured credit card can be an excellent choice to improve your creditworthiness over time. By paying bills on time, you can showcase your responsibility towards handling credit.
This positive repayment behaviour is recorded by credit bureaus and increases your credit score in the long run. You can even convert to a regular credit card in time.
Earning Interest at the Same Time: While getting the perks of a credit card, you also earn interest on the fixed deposit. By choosing a fixed deposit that offers compound interest, you can maximise your payout. This way, you can earn interest not only on the principal amount but also on the interest amount. Traditional credit cards don’t have such a provision.
How to Get a Credit Card Against FD
It is necessary to have a fixed deposit account to get an FD credit card. If you don’t already have an FD, you need to open one. You must meet other criteria like:
- Be aged above 18
- Be an Indian resident
Qualifying on the basis of simple eligibility criteria, you can apply by following these steps:
- Step 1: Visit the official website of the financial institution or access the mobile app
- Step 2: Access the application form
- Step 3: Provide all the required information, as well as the details of your FD
- Step 4: Attach all the required documents, along with your FD documents
- Step 5: Wait for the approval
You can also visit the financial institution’s branch and apply offline.
There are a range of options at your fingertips and to choose the best FD credit card for yourself, check the features, fees and reward structure. If you’re looking to boost your purchasing power and access convenience at every step, consider the One Credit Card. It allows you to get a credit card with a fixed deposit of just ₹2,000.
All you need to do is book an FD through its app and enjoy quick approval. Its full-stack mobile app allows you to check offers near you via GPS, so you never miss out on discounts. For example, you can enjoy a flat 18% off on Apollo 2417 and a flat 10% off on Kalyan Jewellers.
You can also earn 5X rewards on the top two spending categories per month, which you can use to save on your future transactions. Apply now to get your hands on this stylish secured card!