What Is A Credit Card Against FD And What Are Its Benefits?

• By having a credit card against FD (fixed deposit), you can own a credit card by pledging your FD as collateral.
• Having a credit card against FD can be beneficial, especially if you have a low credit score.
• The credit limit allotted to your credit card against FD will depend upon the amount of capital stored in your fixed deposit account.

Having a credit card can be a great tool for completing financial transactions. Through a credit card, you can avail various types of offers, benefits, and discounts that are related to a credit card.One of the popular types of credit cards is a credit card against FD. In this blog, we will be discussing what a credit card against FD is. Additionally, we will also be looking at the eligibility criteria for a credit card against FD.

A credit card against FD is a unique type of credit card that uses the money you have deposited in your fixed deposit as collateral. The deposited amount that you have added to your fixed deposit account will be used to reduce the creditor's risk.

Here is the eligibility criteria for getting a credit card against FD:

• Citizenship and Residence: For you to apply for a credit card against FD, you will need to be an Indian citizen. If you are a Non-Resident Indian (NRI) with a valid address in the country, you too may be able to a credit card against FD.
• Age: Your age should be between 18 to 65 years.
• Fixed Deposit Account: One of the most important criteria for getting your credit card will be having a fixed deposit account with the bank. The amount of money stored in this fixed deposit account will serve as collateral for the credit card.
• Minimum FD Amount: The minimum amount of money that you must have in your fixed deposit depends upon the lender who is giving you the credit card. Usually, the minimum amount ranges from ₹10,000 to ₹25,000.

A credit card against a fixed deposit (FD) is a good option for individuals who:

• Have limited or no credit history: This includes students, new professionals, or those who have had difficulty obtaining credit cards in the past.
• Want to build creditworthiness: Responsible use of this card can help establish and improve your credit score.
• Have a low credit score: If you have a poor credit history, this type of card can be easier to obtain.
• Need a credit card but don't meet traditional income criteria: This card doesn't always require proof of income, making it accessible to those with irregular income sources.

Now let's explore the various benefits of having a credit card against FD: Easy Approval for Individuals with Limited Credit History: These credit cards have a more lenient approval process, making them ideal for those who are new to credit or have a low credit score . Building a Positive Credit History: By responsibly using and repaying your credit card, you can gradually build a strong credit history Continued Investment Growth: Your fixed deposit continues to earn interest throughout the tenure of the credit card, ensuring that your investment remains active. Lower Fees and Charges: FD-based credit cards often come with lower joining fees and annual charges compared to traditional credit cards. Also Read: Credit Card Guide: What Are They and 3 Different Types of Credit Cards

A credit card against FD offers a convenient way to access credit, especially for individuals with limited credit history. By leveraging your fixed deposit as collateral, you can enjoy the benefits of a credit card while ensuring the safety of your investment. However, it's crucial to use your credit card responsibly and make timely payments to avoid any negative consequences.Remember to carefully review the terms and conditions of your credit card agreement to fully understand the associated fees, charges, and interest rates.