When seeking the best secured credit card in India, some key factors and functionality come into play. A secured credit card, also known as an FD-backed credit card, can help you establish credit or improve your credit repayment history. Apart from that, it has numerous other benefits to offer.
Understanding the requirements and application process increases your chance of getting approved. You can compare cards and their benefits and apply for one that suits your financial goals.
Brief on Secured Credit Cards
By pledging your fixed deposit amount as a security, you can get access to this type of credit card. Here are some of its characteristics:
- Financial institutions approve such card easily as they are backed by collateral
- Compared to an unsecured credit card, it is more accessible as it doesn’t have very strict eligibility criteria
- Your deposit amount decides the credit limit. Depending on the financial institution, you can have access to the credit limit of 75%-100% of your deposit amount
- A fixed deposit credit card functions in a way that is similar to a traditional credit card. With the option of buying now and paying later, you also earn reward points and cashback on your transaction.
- Like a traditional credit card, it also requires you to pay your credit card bills on time. Doing this can help you build your creditworthiness.
- Generally, credit card companies provide lower interest rates on it than regular credit cards.
Though it has many pros remember that upon multiple defaults, the financial institution can liquidate your fixed deposit to access the outstanding amount.
However, the institution will inform you before taking such drastic steps to give you an opportunity to pay your dues.
Factors to Consider
There are numerous advantages of using a secured credit card. You can select one on the basis of these features:
- Providing Reward Programs: It is crucial to look for a card that has reward programs that offers:
- Points
- Cashback
- Discounts
These can add up to your savings while making a transaction. Simply select a fixed deposit card offering a maximum reward program that suits your lifestyle.
- Having No Annual Charges: Some fixed deposit credit cards come with annual charges, but you can choose the one without it. Look for a financial institution providing you with a card with a lifetime-free option. While at it, also look for other hidden charges to avoid any unplanned expenses.
- Offering a Good Interest Rate: The most rewarding aspect of using a secured credit card is earning interest on deposits while using it to pay for purchases. To make the most of this feature, you can look for a card with the highest interest rate on a fixed deposit.
- Choosing a Suitable Deposit: Some financial institutions may have a higher deposit amount criterion. Checking for the FD amount required before opting for a specific credit card is crucial.
- Checking the Eligibility Criteria: Many financial institutions provide such credit cards to those with irregular income or low credit scores. Check if your existing debt can lead to a rejection and only apply if you qualify on the basis on all parameters.
- Depending on the Interest-Free Period: Fixed deposit credit cards have lower interest rates in comparison to regular credit cards. However, you have to pay an interest upon failing to pay by the due date. However, by selecting a card with the highest grace period, you can get more time to pay the outstanding bill.
Application Process
Applying for an FD-backed credit card is a simple procedure. However, it is mandatory to have a fixed deposit account. Once you have selected the best secured credit card in India for your financial needs, follow these steps to apply:
- Step 1: Visit the official website of the financial institution or download its app
- Step 2: Provide all the necessary details in the application form
- Step 3: Attach all the required documents
- Step 4: Wait for successful verification
- Step 5: Get the card delivered to your address
Before heading to the application stage, you should verify if you meet the certain mandatory criteria to get a fixed deposit credit card:
- You should be above 18
- You should have a fixed deposit account for more than 6 months (varies depending on the financial institution)
- You should be a resident Indian
Using such cards can be a rewarding experience as you continue to earn interest on your investment. The One Credit Card can be an excellent choice as you can get it by booking an FD of just ₹5,000. You can earn 5X reward points on the top two spending categories, no matter what they are.
What’s more, you can save on your expenses by browsing through a wide variety of seasonal offers. Using the powerful One Credit Card mobile application, you can easily check those offers as well as control all aspects of your usage. Apply online to enjoy the benefits of this secured credit card!
