Credit Cards against Fixed Deposits
Mr. Sharma is enjoying free airport lounge access with his Credit Card. What about you? Get A Card
To get a credit card, customers need to earn a minimum amount of salary annually and also have a decent credit score. This makes it difficult for people with low or no credit score and low salaries to get a credit card. Customers with low/no credit score and salary can now easily get a secured credit card.
A secured credit card is given by banks against fixed deposit. ICICI, SBI, Axis, etc., are some of the banks that offer credit cards against fixed deposit in India. When customers apply for such cards, all the other factors that lead to the approval of a card becomes insignificant because card providers are given a collateral security. This security ensures them that they will get the money they provide as credit back. The credit limit of the customers in this case is decided based on the amount of fixed deposit they have.
Some other factors that affect the issuance of such cards are:
- Debt-to-income ratio.
- Repayment capacity.
- Funds in the fixed deposit.
Credit Cards against Fixed Deposit are best for:
- People with low credit score or no credit history.
- People who do not meet the income criteria.
- People who have just started earning.
- People who live in an area that the lender has blacklisted.
- People who are employed by organizations that are blacklisted by the lender or have a bad reputation.
Features of Credit Cards against Fixed Deposit:
Minimum Amount – You should have a minimum of Rs.20,000 in your fixed deposit.
Credit Limit – Your credit limit will be decided based on the amount of money you have in your fixed deposit account. Generally banks offer 80% to 85% of the deposit amount as credit limit.
Minimum Documentation – To apply for this type of card, you do not need to submit a lot of documents.
Minimum Tenure – The minimum tenure of the fixed deposit that you are giving as security to the bank should be 6 months.
Interest Free Period – Generally, banks offer an interest free period of 48 days to 55 days on such cards.
Rewards – These cards offer multiple rewards such as reward points, cashback, etc., to the customers.
Interest on Fixed Deposit – Cardholders will continue earning interest on their fixed deposit.
Did you know that Mr. Kumar’s Credit Card gets him free movie tickets every month? Get A Card
How to Avail a Credit Card against Fixed Deposit?
The process of getting a credit card against fixed deposit is very simple. To avail such card, you have to first open a fixed deposit account with the bank, which offers this type of card. Most banks require you to have at least Rs.20,000 in your fixed deposit account to apply for this card. If you already have a fixed deposit account with the bank with the required funds, you do not have to open another one. The bank in that case will accept the existing FD as security.
Once the fixed deposit account is opened, you have to simple apply for the card and get your application approved by the bank.
Impact of Secured Credit Card on Fixed Deposit:
When you take a secured credit card against fixed deposit (FD), it won’t affect your FD and you will keep earning interest on it. The rate of interest that you earn will be the same that your bank had set when you had opened your FD account.
The impact of the credit card will be seen at the time of bill payment. In case of you default on your card payment, then the bank will adjust the outstanding amount against your FD account. So, if you want to not hurt your investment, you will have to make sure that you always pay your credit card bills on time.
People who opt for a credit card against fixed deposit primarily to build their credit score will face a problem if they default on their repayment. In such a case, not only will their FD be affected, but it will also have a negative impact on their credit score.
Apart from this, in case of financial emergencies, you do not have to pre-close your FD account immediately, instead you can use your secured credit card to make the payment. As banks offer sufficient time in the form of interest free credit period to cardholders, they get time to repay the bills.
Banks Offering Credit Card against Fixed Deposit:
Some of the banks that offer credit card against fixed deposits in India are:
- ICICI Bank.
- State Bank of India.
- Axis Bank.
- Kotak Mahindra Bank.
- Central Bank of India.
- Bank of Baroda.
ICICI Bank Coral Credit Card Against Fixed Deposit:
ICICI Bank Coral Credit card Against Fixed Deposit is offered to customers without any income related documents.
- 2X rewards on groceries, dining and at supermarkets.
- Buy 1 get 1 free movie ticket during the week.
- 15% savings on dining at more than 800 restaurants.
- Free access to airport lounges.
- 50% special discount on the Joining Fee.
SBI Advantage Plus Card:
Advantage Plus Credit Card is issued against fixed deposits by the State Bank of India. The maximum cash withdrawal limit on this card is 100% of the credit limit.
- Attractive rate of interest available at 2.25% per month.
- Avail add-on cards for family members.
- Convert payments into EMI using Flexipay.
- Withdraw cash from more than 1 million ATMs around the world.
- Interest is accrued on the funds available in the fixed deposit account.
- Easy and convenient loan sanctions are also made available to the borrower by the Bank.
Axis Bank Insta Easy Credit Card:
Axis Bank Insta Easy Credit Card is issued by the bank against fixed deposits. The credit limit on this card is up to 80% of the FD amount.
- Maximum cash withdrawal limit is 100% of the credit limit available.
- Maximum interest free credit period available is 50 days.
- Enjoy fuel surcharge waiver of 2.5% on all fuel transactions.
- The bank assures approval on the credit card application.
- Avail 6 eDGE loyalty reward points on every Rs.200 spent locally and 12 eDGE points on every Rs.200 spent abroad. Get 100 points on your first online transaction.
Central Bank of India Aspire Credit Card:
Aspire Credit Card is issued against fixed deposits by Central Bank of India. The credit limit available on the card will be 80% of the fixed deposit amount. Interest charged per month on this credit card is 1.20%.
- Personal accident coverage of Rs.1 Lakh is offered in the event of death to people who opt for the Group Insurance Scheme.
- Rewards are offered on using the card for dining, travelling, movies, and so on.
- This credit card can be used for international and domestic transactions.
- This card offers interest free credit period of 55 days.
Kotak Mahindra Bank Aqua Gold Card:
Aqua Gold Credit Card is issued against fixed deposits by Kotak Mahindra Bank. The minimum deposit that is to be made in the fixed deposit account is Rs.25,000 and cardholders can avail a credit limit of up to 80% of the fixed deposit amount.
- Maximum cash withdrawal limit is up to 90% of the credit limit available.
- Fuel surcharge waiver of maximum Rs.3,500 can be availed in a year.
- Enjoy Rs.500 worth of railway surcharge waiver.
- Rs.50,000 worth insurance coverage against fraudulent transactions is provided in case your credit card is stolen.
- Avail add-on cards for your family members.
Bank of Baroda Assure Credit Card:
Bank of Baroda Assure Credit Card is an international Visa card that is offered against fixed deposit. The credit limit on this is card is 80% of the fixed deposit amount.
Avail 3 free add-on cards.
- Avail free Personal Accident Death Coverage with this card. Get Rs.15,00,000 worth Air Accident Death coverage and Rs.5,00,000 worth coverage in case of death caused due to other kinds of accidents.
- Earn 1 Loyalty points on every Rs.100.
- Spend Rs.50,000 or more annually and regularly pay your bills to enjoy annual fee waiver for the year.
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar’s partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.