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Understanding secured credit cards against fixed deposits.

Understanding secured credit cards against fixed deposits.

What is a Credit Card?

A  credit  card  allows  you  to  afford  goods  and  services  through  the  convenience  of  cashless  credit  transactions  separate  from  your  savings  or  current  bank  account  with  a  pre-set  credit  limit  set  by  the  issuer.  The  issuer  (usually  your  bank)  can  gauge  a reasonable   credit  limit  by  factors  like  your  credit  or  CIBIL  score,  credit  history, and   income in   a set   period.  You  then have   to  pay  back  the  credit  issuer  (Usually  each  month)  the  credit  amount  used  in  that  period,  along  with  a  small  interest  fee;  however,  there  is  a  period  where  transactions  made  with  the  credit card   bear no  charges.  But   this  is the   traditional  form  of  a  credit  card  and  requires  you  to  meet  specific criteria   that are   out of   the  scope of   many  individuals,  such  as  proof of  income   and ITR  files,  which  is   where Secured Credit Cards come into play.

 What is a Secured Credit Card?

Credit  Card  against  Fixed  Deposit  (AKA  Secured  Credit  Card)  is  a  service many  banks   in  India now  allow   their  customers  to  avail when   they  open  a  Fixed  Deposit  with  the  issuer  bank.  A  credit  card  under  this  scheme enables   individuals  with  limited  financial  access  to  avail  a  credit card   based  on  fixed  deposits. It  is   technically  a  pre-paid  service  where  a portion   of  your  fixed  deposit  amount  is your  credit  limit,   usually between  75  and   85% of the total amount.

W hat are the Benefits of a Credit Card?

  • It is the most accepted mode of payment.
  • You gain reward points, discounts, cashback and more as rewards.
  • As long as you are under your credit limit, your transactions will not fail.
  • It is  incredibly  secure as  banks  have  a  lot  of  resources   dedicated  to  the safety   of
  • You can  avail  EMIs  (Easy Monthly  Installments)  and  Zero   Interest EMIs  while  shopping online.
  • You can  improve  your  Credit  and  CIBIL  score  when  you  practice  good  Credit  Card  holder  habits  like  timely  dues  payment,  consistent  spending  patterns,  moderate  limit  usage, etc.
  • It is  much  easier  to  deal  with  card  scammers  as  your  card  issuer  closely  monitors  spending patterns and notifies suspicious activities immediately.

Who is the target customer for a Secured Credit Card?

A  Secured  Credit  Card  is  for  individuals  with  low  credit  scores  or  no  credit  history,  who  do  not  meet  the  income  criteria,  people  who  have  just  started  earning,  those  who  live  in  an  area  that  the  lender  has  blacklisted  and  people  who  are  employed  by  organizations  that are blacklisted by the lender or have a poor reputation.

What are the benefits of a Secured Credit Card?

  • All the benefits of regular credit cards are here with some additional perks.
  • Secured Credits  are  very  affordable,  and  you  can  get  one  for  as  low  as    10,000  FD.
  • The credit  limit  on  a  secured  credit  card  depends  on  the  fixed  deposit    Typically, 75% to 85% of the deposit amount is the total credit limit on the card.
  • Unlike standard  Credit  Cards,  you  do  not  need  many  documents to   apply for  a   Secured Credit Card.
  • Just like  standard  Credit  Cards,  banks  offer  48  to  55  days  on  Secured  Credit  Cards  which bears no interest, which is slightly higher than regular credit cards.
  • These cards offer multiple perks like reward points, cashback, etc., to the customers.
  • Interest on  fixed  deposit  –  Cardholders  will  continue  earning  interest  on their   fixed
  • Your Credit Limit increases as your FD amount increases.
  • You can now build a credit history and increase your credit score.

 How to Apply for a Credit Card Against Fixed Deposit

Non-FD account holders must open a fixed deposit account with the respective bank. You may  visit the nearest bank branch to open your FD account first followed by the credit card account.  Once you open your fixed deposit account with the bank, you can apply for the credit card at the  same branch by filling up an application for the same or doing it online if your bank features  such a facility.

You can also apply for the secured credit card online, once your FD account becomes active  with the bank. For FD account holders: If you already have a fixed deposit account with the  bank from which you would like to avail of the secured credit card, you can simply apply online  by visiting the bank’s website.

 Documents Required to Apply for a Secured Credit Card.

  • You don’t need to submit any additional documental evidence of your identity or place of  residence. The bank will consider the proofs that you provide while opening the FD account.
  • However, they might check the validity of the same.
  • When opening a new FD account with the bank, you may be asked to submit your identity and residence proof.

 Things to remember before getting a Secured Credit Card.

  • The minimum tenure of the fixed deposit to get this service is 6 months.
  • Your FD amount is locked in for the duration of the FD.
  • Your deposit  will  be  affected  if  you  fail  to  pay  dues  in  time  along  with  your  credit
  • SSC can not be used to deposit money.
  • Foreigners can not avail of this service.
  • The FD  serves as the security deposit for the credit    In  case  of  failure on the credit  card payment,  the  credit  card  issuer  reserves  all  the  rights  to  withdraw  your  deposit.  However, before such action,  you will be   informed  by  all communication   lines.


A SSC is a great way to get your credit score and history started, especially if  you  have limited financial capacity. These scores enable you to  get approved  for loans easier and faster. It also builds good spending habits and teaches responsible accounts handeling.