India,June 21,2024-Credit cards offer multifaceted benefits to users for many direct and indirect reasons. Apart from helping you in times of financial crunch, they help build a credit score to improve eligibility for future credit applications. Several e-commerce platforms offer EMI deals on certain products through credit cards only. However, a credit card may not be accessible to everyone. You must meet the minimum income and credit score criteria to obtain one. That is when a secured credit card against a fixed deposit (FD) is worth consideration.
Existing account holders can open an FD with Kotak811 and apply for a credit card against it. If you are considering applying for one, read on to explore the convincing reasons.
What is a Secured Credit Card Against Fixed Deposits?
A secured credit card works similar to a regular credit card. The primary difference is that it is secured against an FD as collateral, lowering the risk level for the card issuer. These cards are highly beneficial and easily accessible to those with poor or no credit history. You can obtain it against your fixed deposit and build your credit score by paying its bills on time. However, the credit card provider will recoup their money from your FD if you do not pay the bills on time.
The best thing about credit cards against fixed deposits is that you can obtain it with a minimum FD amount of Rs 5,000. The FD amount is crucial in determining the available credit limit, which can be as much as 90% of the FD amount. The bigger the FD, the higher the credit limit.
Reasons to Apply for a Credit Card Against FD
Are you contemplating why you should apply for a credit card number against a fixed deposit? Take a look at these reasons:
- No Credit History Required
A customer’s credit history is a major determiner companies consider before issuing a credit card. Depending on their credit history, they judge the applicant’s intention and capacity to repay the bills on time. Therefore, you must have a decent credit score to obtain a regular credit card, making it inaccessible to those with a poor credit history.
However, secured credit cards against fixed deposits require no credit score consideration. Since the card issuer has your fixed deposit as security, they approve your application without hassle. The user can build and improve their credit score with timely credit card bill payments to improve eligibility for future loans.
- No Income Proof Required
Companies check a customer’s income stability to determine their eligibility to obtain a regular credit card and pay their bills on time. That is why individuals with low incomes or unstable income sources find it difficult to get a credit card. When applying for a regular credit card, they must provide proof of income to support the application. The credit card issuer only accepts the application if the applicant meets the minimum income criteria.
On the other hand, with a secured credit card against fixed deposits, the card issuers do not ask for proof of income to prove the applicant’s financial security. That is why these credit cards are also accessible to low-income applicants.
- Minimal Paperwork
Credit card companies require several documents to approve regular credit cards, including identity, address, and income proofs. They issue credit cards only after verifying all the documents, making the process time-consuming and lengthy. Conversely, applying for a credit card number against an FD is much quicker and easier. Since the bank where you hold the FD already has proof of your identity and residence, they seldom ask for additional documents.
- Enjoy the Perks of Regular Credit Cards
Regular credit cards offer many advantages, such as reward points, cashback offers, discounts, etc. However, obtaining a credit card against a fixed deposit allows you to enjoy the perks of regular cards along with the benefits of secured credit cards. Moreover, you can obtain a credit card against an FD as small as Rs 5,000. Some credit card issuers offer interest-free periods of 48 to 55 days, during which you can purchase using the credit card without paying interest.
- Continue Enjoying the Benefits of a Fixed Deposit
Apart from obtaining a credit card with up to 90% of the FD’s credit limit, you can continue earning interest on the fixed deposit. These lifetime-free credit cards do not charge a joining, annual, or renewal fee. Therefore, you can earn interest on your fixed deposit without paying an extra fee for the credit card.
With a credit card against fixed deposits, you can maximise the benefits of an FD and get a credit limit of up to 90% of the FD amount. With regular payments, you can improve your credit score and qualify for an unsecured credit card or loan. Kotak811 offers credit cards against fixed deposits to any individual holding an FD at the Kotak Mahindra Bank. With no credit score or documentation, you can obtain a credit card with an FD as small as Rs 5,000.
Media Info:
Name: Support Kotak811
Organization: Kotak811
Website: https://www.kotak811.com/
Email: info@kotak811.com
Address: India
