Why Should You Apply for a Credit Card Against FD

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A credit card is a convenient and cashless payment mode for online and offline shopping and bill payments. However, not everyone is eligible to get a credit card. The good news is that you can get a credit card against your fixed deposit (FD). Yes, you heard it right!
This ‘secure’ credit card is ideal for those with a low credit score and no income proof. It is also perfect for those aiming to enhance their credit score for better loan prospects.
Leading banks extend up to 90% of your FD as the credit limit. This means the higher your FD amount, the greater your credit card’s limit.
Here are the compelling reasons to embrace an FD credit card for a secure and strategic approach to your financial endeavors.

Reasons to Apply for a Credit Card Against FD

Consider applying for a Credit Card Against FD if: ● Your income is low or hard to prove. ● You’re a startup entrepreneur, college student or homemaker. ● Access to proof of income is challenging
ng. A secure credit card requires no additional income proof, making it accessible to those with low credit scores or no credit profiles. Your fixed deposit acts as security, granting you a credit card to spend and pay later.
Benefits of Credit Card Against FD
Here are some of the top benefits of getting a credit card against FD:
1. Lower Interest Rates

Unlike typical credit cards, these secure counterparties offer substantially lower interest rates, ensuring manageable repayment even without a consistent cash flow.
If the apprehension of high interest rates has deterred you from exploring conventional credit cards, opting for a credit card against FD can be prudent. Banking institutions often provide these secure credit cards with interest rates significantly lower than regular ones. Enjoy the freedom to spend and repay without the looming concern of excessive interest payments.

2. Boost Credit Score
Owning a credit card against FD isn’t just about convenience; it’s a strategic move to boost your credit score. By responsibly using this secure credit card, you can increase your creditworthiness. This proactive step makes future credit card applications favourable, potentially securing higher limits.
A good credit score gives you favorable loan terms and negotiation power for the future. Consider a credit card against FD as a financial tool and a proactive means to bolster your creditworthiness for future financial endeavors.

Must Read: How to Get a Secured Credit Card with your Kotak811 Zero Balance Savings Account

3. Reduced Paperwork
Experience the ease of getting a credit card against FD with significantly reduced paperwork. Unlike regular credit cards, the application process for a secure credit card involves minimal documentation. No more exhaustive searches and lengthy formalities – enjoy the perks of a credit card with streamlined procedures.

4. Minimum FD Tenure

For the perks of a credit card against FD, note the essential minimum fixed deposit tenure. Typically, banks require the fixed deposit to be in your account for 6-8 months before applying for a secure credit card. This ensures you can fully leverage its advantages.
5. Cashbacks and Interest-Free Periods

Secure credit cards provide enticing cashback options and offer coupons for your card transactions. Additionally, most banks extend an interest-free period, typically 48 to 55 days. Make the most of your secure credit card by relishing these benefits for smarter and more rewarding financial transactions.

Conclusion

Credit cards against FD provide notable advantages. Remember, your fixed deposit serves as security. In case of non-payment, the bank has the right to settle bills from your deposit. Despite this, it’s an excellent option for those with a low credit history, homemakers, seniors, and non-salaried professionals.

FAQs

1. Can you withdraw money from a credit card against FD?
Yes, you can utilize your credit card against FD to withdraw money within the specified credit limit.

2. What is the interest rate of a credit card against FD?

The interest rates on FD-backed credit cards are typically lower than traditional credit cards.

3. What is the maximum limit of a credit card against FD?

Credit limits usually range up to 90% of the deposited sum in the fixed deposit.

4. Can I increase my FD credit card limit?

Banks may not allow an increase in credit limits as they are based on the FD amount. However, increasing the FD amount can lead to an increase in the credit limit.
4. What is the benefit of an FD credit card?

Benefits include accessibility with a low credit score, no income proof requirement, and a chance to improve credit history.
5. What is the minimum FD amount to get a credit card?

The minimum FD amount starts at Rs 5,000 only. You can check specific requirements with the preferred bank.

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