A fixed deposit credit card is issued against your FD investments. It is also known as a secured credit card. The FD acts as collateral for the bank or the card issuer, reducing the overall risk. The credit card limit is often decided by the card issuer based on your FD investments.
Why Choose A Fixed Deposit Credit Card?
1. Suitable For Credit History: It ensures that you can get a credit card even if you don’t have a credit history. A credit card against an FD could be a suitable instrument to build a healthy credit history.
2. Can Help Build A Good Credit Score: Using the card responsibly and paying bills on time can help improve your credit score.
3. Earn Interest on FD: Your fixed deposit continues to earn interest, unlike other secured credit cards that may require a cash deposit without returns.
Steps To Get A Credit Card With A Fixed Deposit
· Open An FD: The first step is to open a fixed deposit with a bank that offers FD-backed credit cards.
· Apply For The Card: To apply for the credit card, you can use your bank’s internet banking portal or mobile app.
· Link Your FD: When you take a credit card against your fixed deposit, the bank marks a lien on it. In simple terms, your deposit is treated as security and you won’t be able to access that money until the credit card account is settled or closed.
· Receive and Activate The Card: Once approved, the bank will issue the credit card within 7–14 working days. You’ll receive the card by post or you can collect it from the branch.
