Benefit from a credit card against fixed deposits? Know the details here
New Delhi: Secured Fixed Deposit Credit Card is the best option for low income people with bad credit, irregular income, no proof of income, elderly and stay at home moms.
There have been numerous reports of companies refusing credit card claims for various reasons. If the applicant does not have a good credit history or has a low credit score, the bank may refuse to issue a credit card to the user.
On the bright side, we are all aware of the many benefits that come with a credit card. They are not only necessary in times of financial emergency, but they also help in improving a credit score for future loan applications. Additionally, some e-commerce sites only accept credit cards for specific goods purchased in equal monthly installments (EMI).
Don’t worry, there is another way to get a credit card. You can apply for a credit card with the guarantee of your fixed deposits. Fixed deposit investments are extremely popular as many banks offer competitive rates and allow their customers to earn significant returns. If you’ve been looking for a credit card for some time, you should consider applying for a secured credit card, which is secured by your fixed deposit.
How to get a credit card against fixed deposits?
As the name suggests, a bank will issue a secured credit card to a consumer in exchange for an FD which they guarantee as security or collateral for the card. It is suitable for consumers with no credit history or with a low credit score.
Secured credit cards are offered to customers who have FD accounts at banks and other financial institutions and want to establish their credit. When a secured credit card is issued, the bank attaches a lien (a claim or legal right) to the FD until the credit card is returned.
If you already have an FD account, you can apply for a credit card at your local bank. You can also do this by visiting the bank’s website. If you do not yet have a savings account, you can open one by going to the nearest bank branch. When you open an FD account, some banks offer you a bonus credit card. If you don’t have one, you can apply online.
Benefits of availing a credit card against fixed deposits
Banks frequently check a consumer’s credit history before issuing a credit card. Those with bad credit or no credit history, on the other hand, can still get a secured credit card. On the other hand, you can improve your credit history or your CIBIL score by making timely payments with a secure credit card.
Second, banks prefer to issue credit cards to customers who have consistent sources of income. However, this is not the case with a secured credit card. Banks do not require customers to provide proof of income as time deposits are considered proof of financial security. In fact, low-income people can use their fixed deposit money to qualify for a higher credit card limit.
In addition, applying for a credit card with your fixed deposit as a guarantee is much easier and faster. The amount of documentation required is minimal as you already have a bank account which contains the majority of the required documents. Other documents, like proof of income, are less important with a secured credit card because your fixed deposit serves as a security deposit.
Additionally, regular credit card holders receive a variety of benefits such as free travel insurance, bodily injury coverage, reward points, and more. In this case, you can take advantage of the advantages of the credit card as well as the advantages of investing in a fixed deposit. Banks offer the best FD rates and the interest you earn on your deposits increases the value of a credit card.
Fixed Deposit Secured Credit Card is the best option for those with low income, bad credit, irregular income, no proof of income, seniors and stay-at-home moms. However, if you do not pay your credit card charges with interest over a period of several months, the bank may seize your fixed deposits in order to recover the credit amount. Moreover, since the fixed deposit is linked to the credit card, you cannot withdraw it in advance, even in an emergency.