You can get an instant credit card against FD if you are not eligible for a regular unsecured credit card. This can be due to no or low credit history. The deposit you pledge acts as collateral, which reduces the issuer’s risk of loss due to non-payment.
How to Apply for a Secured Credit Card?
Here is an easy guide on how you can get an instant credit card against FD:
If you are a non-FD account holder:
Most issuers allow you to get a secured card even if you don’t have an active deposit. In this case, you will be required to open an FD account while applying for the card. So, you need to choose an issuer based on interest rate and other factors like rewards, offers and terms and conditions. Once finalised, visit the nearest bank branch to open your account and get the card or apply via their website.
If you already have an active FD account:
If you have an FD with the bank from before, you can avail a credit card against it by visiting the bank or applying online.
Benefits of FD-Backed Instant Credit Card
Some of the advantages of this type of credit card are:
- You can get a credit card with a short or no credit history.
This credit card comes in handy for students, homemakers, freelancers and freshers. It is also an affordable option as the FD amount usually starts at ₹5,000 or ₹10,000, depending on the issuer.
- You can continue to generate interest from your FD.
Taking credit and keeping this amount as security doesn’t affect your returns from this deposit. The interest rate remains the same till the FD matures.
- You can apply for a credit card with minimum documentation.
The application process is relatively easy as you are already registered with the bank due to your existing FD. Your personal information is secure with the bank and is useful while applying for an instant credit card. No income proof is required.
- You can enjoy a low tenure and interest-free period.
The minimum period for an FD is generally 6 months, which can be manageable. Also, many banks offer an interest-free period of 48-55 days on such FD-backed credit cards.
- You can enjoy rewards and many other privileges.
You can enjoy all the additional benefits of a secured credit card, like reward points, bonus points, access to the airport lounge, discounts and cashback. Note that they may not be as high as those with unsecured cards.
- You can build a good credit history.
You can begin to build a good credit history from here if you have a poor or no credit score. It is suitable for building a good repayment track record, which can be handy when applying for loans.
Tips to Boost Your Credit Score
One of the greatest benefits of this credit card is you enjoy all the features of a regular credit card and get to earn interest on the FD at the same time. It is a perfect opportunity to experience financial freedom with credit and build a good credit history for the future. Even if you have a low credit score, here are a few tips to increase it.
You should pay your bills on time
Always focus on repaying your dues on time to avoid interest and improve your credit score. You can make timely payments by setting up alerts, auto-pay, or using the easy EMIs feature.
You should aim to maintain a healthy credit utilisation ratio
Try to keep the ratio below 30%. You can monitor your credit profile and ensure it doesn’t exceed this and maintain a healthy credit profile.
You should avoid falling into debt
Do not miss your due dates for repayments. Late payments will invite a high interest, impact your credit score and create a debt cycle.
Applying for an FD-backed credit card is a great alternative for people who want to enjoy offers and rewards on credit cards along with building their credit history. Now, you can apply online and get an instant credit card against FD at home. You get to enjoy all this with minimum documentation and waiting time.
For the best deals and credit experience, you can consider the One Credit card. You can get a secured or an unsecured card, as per your needs. It is among the best rewards credit card in India today. You can earn 5x rewards on your top 2 spend categories and amazing offers on food, dining, entertainment, travel, utility bills and much more.
It’s a lifetime free credit card with no annual or joining fees and zero redemption charges. You can book an FD ranging from ₹5,000 to ₹1 lac and get a limit of up to 100%. Apply now and enjoy financial freedom with a sleek metal credit card.