Are you aiming to build or enhance your credit history? Then, getting a Fixed Deposit (FD) Credit Card issued by financial institutions is the perfect choice for you. It allows you to avail of credit card facilities with a Credit Card App, where your deposit acts as security for the credit limit.
Let us explore the advantages of opting for a credit card against a FD and understand how this financial option can be advantageous for individuals with no or limited credit history:
- Easy approval Process
Applying for a credit card against a FD is a simple and faster approval process. Financial institutions consider this financial tool less risky because a deposit secures the credit limit.
- No Credit Check worries
This credit card option only requires your strong credit history with a credit score of more than 750, unlike traditional credit card applications. Here, the FD serves as collateral that enables individuals with low credit scores or no credit history to access a credit card facility.
- Build or Improve Credit Score
This credit card option provides an excellent opportunity to build or improve your credit score. Your timely repayments and responsible credit card usage can positively impact your credit score and strengthen your financial standing. It enables you to access more favourable credit opportunities in the future.
- Maintain your Fixed Deposit
This credit card option allows you to keep your deposit safe and intact while availing of a regular credit card might require breaking a fixed deposit. You can enjoy the benefits of a credit card while still earning interest on your fixed deposit. It is a win-win situation for you to have financial security and credit card convenience.
- Lower Interest Rates
This credit card often comes with lower interest rates, contrary to unsecured traditional credit cards. It might be a significant advantage for individuals who occasionally carry balances because it helps to minimise the overall interest costs. With this feature, you can efficiently manage your finances and save on interest payments while enjoying the benefits of using a credit card against your fixed deposit.
- No Income Requirements
This credit card option does not require any specific income requirements, unlike regular credit card applications, because the focus of creditworthiness shifts from income to the value of the FD. It makes credit cards more attainable to individuals regardless of their income level.
- Flexible Credit Limit linked to Fixed Deposit
This credit card option offers a credit limit related to the value of the deposit. Banks or financial institutions provide credit limits ranging from 70% to 90% of the FD amount. As your FD grows, your credit limit increases, which motivates you to save more and more and enables you to enjoy a higher credit limit while your FD continues to earn interest.
- Enjoy Rewards and Perks
This credit card option comes with exciting rewards, cashback, and transaction discounts similar to standard credit cards. You can enjoy these perks while using your credit cards for day-to-day expenses or significant purchases. Whether earning reward points, getting cashback on some transactions, or availing exclusive discounts, these perks will add value to your credit card experience.
- Flexibility in Repayment
This credit card option offers you flexibility in repaying your credit card bills. You can either select to pay the total outstanding amount or opt for minimum payments, depending on your financial situation. It empowers you to manage your credit card bills according to your financial capacity, ensuring a smoother credit card experience.
- Path to unsecured Credit Card
This credit card option may serve as a pathway to obtaining a regular, unsecured credit card because of your responsible and punctual use of a credit card linked to FD. Financial institutions may upgrade the credit card after evaluating your credit behaviour and financial stability over time which allows you to build a positive credit history and shows your strong creditworthiness.
Conclusion
Opting for a Fixed Deposit Credit Card with the help of a Credit Card App offers a range of benefits when you want to build or improve your credit history. By responsibly managing credit cards and FDs, you can enhance your credit scores and eventually achieve your financial goals more effectively.
