In today’s financial world, getting a credit card can sometimes feel like a daunting task, especially if your credit score is low or you lack a strong credit history. However, there’s a smart solution that’s gaining popularity — Fixed Deposit (FD) Based Credit Cards. Banks and fintech companies are now offering these credit cards, and they’re a game-changer for many individuals. If you're looking to boost your credit score, access better deals, or simply want a card that’s easier to get, here’s everything you need to know about FD-based credit cards and how they can change your financial life.

What Are FD-Based Credit Cards?

FD-based credit cards are credit cards that are issued against a fixed deposit that you hold with the bank. In simple terms, the bank allows you to use a percentage of your FD amount as a credit limit. The FD acts as collateral, reducing the bank's risk and making it easier for you to get a credit card, even if you have no credit history or a low score.

· How it works: You deposit a certain amount in a fixed deposit (e.g., ₹20,000). The bank may offer you a credit card with a limit that’s a percentage of that FD, often up to 85%-90% of the deposit amount.

· Example: If you have an FD of ₹50,000, your credit card limit could be ₹40,000 to ₹45,000.

Top Benefits of FD-Based Credit Cards

1. Easier Approval

FD-based credit cards are easy to obtain since your fixed deposit acts as security for the bank. They’re perfect for individuals who might not be eligible for a regular credit card due to a lack of credit history or a low credit score.

2. Build or Improve Your Credit Score

Using an FD-based credit card responsibly can help you build or improve your credit score. By paying your dues on time and using the card wisely, you show the bank that you’re a responsible borrower, which can eventually help you qualify for unsecured credit cards in the future.

3. Fixed Deposit Provides Security

Your fixed deposit provides security for the bank. If you fail to repay, the bank can adjust your dues from the FD, making it a lower-risk option for lenders. This makes it easier for you to access credit when you might not otherwise be eligible.

4. Low Interest Rates

FD-based credit cards usually have lower interest rates compared to unsecured cards, because the bank has the backing of the FD. This means you can enjoy the benefits of a credit card without the worry of high-interest charges if you carry a balance.

5. Higher Approval Limit

Your credit card limit is directly tied to the amount of the FD. This can be especially useful if you’re just starting to build your credit or if you need access to a higher credit limit for specific purchases.

How to Use FD-Based Credit Cards Wisely

1. Pay Your Bill on Time

Even though your FD serves as collateral, the key to building a good credit history is to pay your credit card bills on time. Late payments can negatively affect your credit score, so be sure to manage your payments carefully.

2. Keep Your Utilization Low

Try to use only a portion of your available credit limit. Ideally, your credit utilization should remain below 30% of your credit limit. This will show banks that you can manage credit responsibly and increase your chances of qualifying for higher limits and better cards in the future.

3. Link Your FD to Multiple Cards (If Available)

Some banks allow you to use your FD to back multiple cards. This can help you manage different types of purchases (e.g., one for daily expenses, one for large purchases) while keeping your credit utilization in check.

Amazing Deals and Offers with FD-Based Credit Cards

One of the best parts of having an FD-based credit card is the exclusive deals and offers you can enjoy. While the exact deals will vary by bank and card issuer, here are some typical perks you can expect:

1. Cashback on Purchases

Many FD-based credit cards offer cashback on daily spending, such as groceries, fuel, or online shopping. For example, you could earn 1% to 5% cashback on your purchases, which helps you save money.

2. Discounts on Shopping and Dining

Expect discounts and special deals on shopping and dining through partnerships with various retail brands, online platforms, and restaurants. Some banks offer additional discounts or reward points on certain categories like travel or electronics.

3. Exclusive Access to Lounge and Travel Benefits

Several banks offer airport lounge access, priority boarding, and travel discounts for FD-based credit card holders. You might also get access to exclusive offers on hotel bookings and flight tickets.

4. Zero-Fee for Annual Membership

Some banks waive the annual fee on your FD-based credit card for the first year, or if you maintain a minimum balance in your FD. This makes it an affordable option without hidden costs.

Conclusion: Unlock the Power of FD-Based Credit Cards

FD-based credit cards offer an easy, secure, and beneficial way to get access to credit, especially for individuals with low credit scores or no credit history. Not only do they provide the safety of an FD, but they also help you build or improve your credit score over time. By using these cards wisely, you can enjoy the amazing deals and offers, while securing better financial flexibility in the future.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.