Swipe Wisely: The Ultimate Guide to Credit Cards Secured by Fixed Deposits

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In today’s dynamic financial landscape, credit cards secured by fixed deposits (FDs) offer an astute financial choice, particularly for individuals with limited or no credit history, or those aiming to fortify their credit scores. These credit cards are underpinned by a fixed deposit, serving as collateral for the issuing institution. Should a cardholder default on payments, the issuer possesses the recourse of using the fixed deposit to recover their losses.


Advantages of Credit Cards Secured by Fixed Deposits

Accessibility: Credit cards secured by FDs are notably more attainable than conventional credit cards. This accessibility stems from the fact that the issuer has a secure collateral source in the form of your FD.

Credit Building: Effectively utilizing a credit card secured by an FD, coupled with punctual payments, constitutes a commendable strategy for cultivating a robust credit history. This, in turn, can yield lower interest rates on future loans and extended lines of credit.

Convenience: These credit cards offer the same level of convenience as traditional credit cards. They enable online and in-store purchases, as well as cash withdrawals from ATMs.


Pre-Application Considerations

Before embarking on the journey of obtaining a credit card secured by an FD, it’s prudent to take the following factors into account:

Interest Rates: These cards typically entail higher interest rates than conventional counterparts. This is attributable to the augmented risk associated with lending to individuals with limited credit histories.

Annual Fees: Many of these cards have annual fees, which can vary according to the issuing institution and the specific card you select.


Credit Limit:

The credit limit of a credit card secured by a fixed deposit (FD) in rupees is typically 80-90% of the amount of the FD. For example, if you have an FD of ₹100,000, your credit limit could be ₹80,000-₹90,000.

However, it is important to note that the credit limit ultimately depends on the issuer of the credit card. Some issuers may offer lower or higher credit limits, depending on their own risk assessment policies.

Here are some examples of credit cards secured by FDs in India, with their respective credit limits:

SBI Credit Card Secured by FD: Credit limit of up to 85% of the FD amount
Kotak Mahindra Bank Credit Card Secured by FD: Credit limit of up to 90% of the FD amount
ICICI Bank Credit Card Secured by FD: Credit limit of up to 85% of the FD amount
HDFC Bank Credit Card Secured by FD: Credit limit of up to 90% of the FD amount.


Utilizing an FD-Secured Credit Card Wisely

To maximize the benefits and minimize risks associated with these credit cards, adopting the following strategies is recommended:

Timely Payments: The cornerstone of building a strong credit history is ensuring that credit card payments are made punctually. Even a single late payment can have detrimental effects on your credit score.

Manage Credit Utilization: Keep your credit utilization ratio below 30%. This ratio is the amount of credit you’re currently using in comparison to your total available credit.

Pay in Full Monthly: Whenever possible, endeavor to pay off your credit card balance in its entirety each month to evade interest charges.


Additional Recommendations for Wise Usage

To further enhance your financial acumen when utilizing credit cards secured by FDs, adhere to the following suggestions:

Comparison Shopping: Before making your selection, evaluate offers from different issuers, considering interest rates, annual fees, and credit limits.

Tailored Selection: Align your choice of card with your unique needs and spending patterns. If you frequently travel, consider a card that offers travel-related rewards. For those seeking to establish a credit history, opt for a card with a modest annual fee.

Monitor Your Credit: Regularly review your credit report, which you can obtain for free from the major credit bureaus once annually. Scrutinize the report meticulously for errors and consider utilizing a credit monitoring service to track your credit score’s evolution.



In conclusion, credit cards secured by FDs can serve as a strategic financial instrument for individuals with limited or no credit history, or those aspiring to bolster their credit profiles. By applying these cards judiciously and adhering to the aforementioned recommendations, you can harness the advantages of credit while maintaining a prudent financial approach.


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