Credit Card against Fixed Deposits: A Tool to Build Credit Score

Updated on: 15 Jan 2024 // 4 min read // Credit Cards
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Credit Cards against Fixed Deposits are an excellent tool of mending a bad credit history and building up your credit score. Generally, Credit Cards are issued as an unsecured product to people who meet eligibility criteria such as income levels, credit scores, and income stability. These are Unsecured Credit Cards and do not require any kind of security by the person to whom the card is issued. However, some individuals need Credit Cards but are unable to get them because they fail to meet the eligibility criterion established by the banks.

Credit Cards against Fixed Deposits are ideal for people who have liquid money but do not meet the pre-established parameters for Unsecured Credit Cards. Herein, the Fixed Deposit acts like collateral security, and the card limit is assessed as per the deposit value.

Also Read: CIBIL Full Form

Top Secured Credit Cards in Market

Various banks offer Credit Cards against fixed deposits. All these banks have their specialised products with different norms. Card Limit, tenure, and rate of repayment are a few factors which vary depending on the card issuer or bank from which Credit Card is sought.

Some of the leading Secured Cards in the market are:

  1. SBI Unnati by State bank of India,
  2. Assure by Bank of Baroda,
  3. Insta easy by Axis bank
  4. Aqua Gold by Kotak Mahindra Bank
  5. Coral Credit Card by ICICI Bank
  6. PayLess Credit Card by DCB
  7. Usecure Card by Union Bank of India

Type of deposit, amount of fixed deposit, tenure of deposit, forfeiture clauses, repayment norms are a few considerations which are decided before issuance of Credit Card against Fixed Deposit.

You can apply for Credit Card by opening a fresh Fixed Deposit or against a pre-existing Fixed Deposit. Industry majors like SBI Card issued Credit Cards to individuals irrespective of the bank with which the Fixed Deposit is held.

Also Read: CIBIL Dispute

Who all apply for Secured Credit Cards against Fixed Deposits?

Credit cards against Fixed Deposits are most suitable to people:

  • With poor credit history.
  • With a low credit score.

With an inability to furnish an income record. This includes retired people and homemakers.

With the inability to furnish Income Tax Returns.

With the inability to meet the minimum income criteria.

With residence in locations which have been blacklisted by the lender.

With employment in organisations which have been blacklisted by lenders.

Also Read: CIBIL Score Range

Features & Benefits of Credit Cards against Fixed Deposits:

Being secured cards from your bank, issuance of Credit Card will generally require very little paperwork.

Purchases made using the Credit Card are like short term loans and need to be repaid as per the repayment cycle pre-set by the bank. Credit cycles generally vary from 20 to 50 days for Secured/Unsecured Credit Cards.

Banks do not charge any interest on card spends if repayment schedule is adhered to. These borrowed sums may, however, be subject to pre-decided interest rates if Credit Card payments are not made within due timelines.

Also Read: CIBIL Score Check Free Online By PAN Number

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