Here’s how to get a credit card on a fixed deposit

Summary: A credit card issued against a fixed deposit is an easy way to start your credit card journey. Read to know how to get a credit card against a fixed deposit.

02 May 2023 by Team FinFIRST

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Credit card issuers often carry out a credit check before offering credit cards. They determine your creditworthiness and how well you manage your debts as a security measure. However, some issuers may charge a higher interest or reject your application if you don’t have a good credit score.

If you are a new applicant or struggling with a low credit score, you can consider choosing a credit card against an FD to get attractive rebates and offers. Let’s understand the benefits and ways of getting a credit card on a fixed deposit in the article below.

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How does a credit card against FD work?

The concept of secured FD credit cards works well for new applicants or individuals already in debt and looking for a credit card. To understand how a credit card against fixed deposit would work, we need to understand how banks determine the risks before offering a credit card.

You can get an affordable credit card on FD even when you have a low credit score. You just need to pledge the minimum deposit to your bank.

Usually, banks undertake a creditworthiness evaluation through your credit score. They verify your income and expenses and how well you manage your running finances and debts. Your CIBIL score helps financial organisations to calculate the risk. In case you have a good credit score, you get preferential rates and exclusive offers. If you don’t have a decent score or are a new applicant, banks may not offer you a good deal or reject your application altogether. To avoid such a situation, you can opt for credit cards against FDs where your fixed deposit works as collateral to secure your borrowings.

FIRST WOW! Credit Card is one of the best credit cards against FDs. Along with being affordable, it does not include any annual membership and is free for a lifetime. Moreover, to acquire this FD-backed credit card from IDFC FIRST Bank, you don’t need a lengthy application process. All you need is to create a fixed deposit having a minimum amount of ₹20,000 to receive the card while enjoying the industry’s best interest rates on your deposits.

Benefits of a FD-backed credit card

A credit card against FD accompanies several benefits as mentioned below.

· It is very easy to qualify for an FD credit card since most banks offer lenient criteria and minimal documentation during application.

· You can enjoy a high credit limit on your first credit card as the limit depends on the amount you deposit. Most issuers offer a between 70-100% credit limit on your FDs.

· You also get preferential interest rates since your credit card is backed by your FD providing security to the bank.

· By managing your card efficiently and repaying your dues on time, you can build a decent credit score and history to aid you for future loans and credits.

· You earn exciting rewards, cashback and offers on your FD credit card. For instance, IDFC FIRST WOW! Credit Card offers up to 4X rewards on every expense.

· Although your fixed deposit acts as collateral, you earn interest on your FD and, it helps you grow your wealth.

Who should apply for a credit card against FD?

Considering the features and benefits of an FD credit card, the following applicants can highly benefit from one:

· First-time credit card applicants

· Those without an income proof

· Those with a low credit score

· Self-employed, retired individuals, or those without a regular income

· Those denied an unsecured credit card by the issuer

Starting your credit journey with a credit card and an FD is the best way to go. Aside from getting affordable rates and interest on your deposits, you can also build your credit history and CIBIL score by repaying your bills on time, making it easier to obtain future loans. Consequently, you will be able to get better loan terms, higher credit limits, and more loan options in the future. With credit cards, you can also earn rewards, earn cashback, and get other benefits to maximize the value of your money.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.