Are you wondering about what is the use of a credit card before opting for one? Credit cards are among the most preferred ways to purchase on credit and build a credit score. Moreover, owning credit cards can help you add advantages like cashback on purchases.
Also known as a secured credit card, a credit card against a fixed deposit is an excellent option for individuals who don’t possess a credit history or have poor credit scores. Let’s find everything on this topic, its pros and cons, how to apply, and more.
Features And Benefits Of FD-Based Credit Cards
Following are the features and benefits of credit cards applied against a fixed deposit:
- You do not have to bear unnecessary charges to get a credit card on a fixed deposit.
- Financial institutions offer credit cards on fixed deposits within an interest-free period of 48 to 55 days.
- You can also earn reward points while using your credit card on a fixed deposit.
- Using a credit card against a fixed deposit properly and paying dues on time will help you to improve your credit score.
- In general, the rate of interest on secured credit cards is lesser than on unsecured credit cards
- You have to bear minimum or negligible paperwork to get your credit card against a fixed deposit if you are an existing FD holder with a financial institution.
- Being a potential customer, you will earn reward points, cashback, etc.
- You do not have to bear the headache of CIBIL score as the credit card is offered against an existing fixed deposit.
- There is no need for Income Tax Return (ITR) documents while issuing a credit card on a fixed deposit.
- The minimum tenure of the fixed deposit is six
Steps To Apply For A Credit Card Against Fixed Deposit
Applying for FD-based credit cards differs from one financial institution to another. In general, you must follow the steps mentioned below to obtain your credit card against a fixed deposit:
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Having a fixed deposit with the financial institution:
The steps to apply for an FD-based credit card while having an FD with a financial institution are as follows:
Step 1: Navigate to the official website of your financial institution
Step 2: Go to the credit cards section and click on the credit card against fixed deposits section.
Step 3: Enter your necessary details on the website.
Step 4: Fill out the details of your credit card application form accordingly
Step 5: After entering the details, submit the application form and upload the required documents.
Step 6: The financial institution will thoroughly review your application and issue the card after approval.
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Having no fixed deposit with the financial institution:
The steps to apply for an FD-based credit card if you do not have a fixed deposit account with a financial institution are as follows:
Step 1: First, open a fixed deposit account with your financial institution.
Step 2: After opening the account, go to the official website of your financial institution and select a credit card against a fixed deposit.
Step 3: Enter the credentials as mentioned in the application form
Step 4: Submit your application and check the required documentation.
Step 5: After the review and approval of your application, you will receive the FD-based credit card.
Eligibility Criteria For Credit Card Against Fixed Deposit
The eligibility criteria for obtaining an FD-based credit card vary between issuers. Stated below are some of the standard eligibility criteria to get a credit card against a fixed deposit:
- The applicant must be a minimum of 18 years old
- Must hold a fixed deposit with the issuer
- The applicant has to pledge the fixed deposit with a tenure of at least six months.
Hopefully, your queries about credit cards against FD have now been answered, along with their features and advantages. First, make sure to repay your dues timely and use your credit card sensibly to avoid financial pitfalls and build a steady credit score.
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