What are FD-based credit cards?:Find out how you can use those to improve your credit score build credit history

If someone has a poor CIBIL score or hasn’t built any credit history yet, getting a credit card is difficult. For such people, banks provide a separate facility called FD based credit card. In this, first the bank account holder has to open a fixed deposit (FD) and then, the bank issues a credit card with a fixed limit based on that FD. This reduces the bank’s risk and the card gets approved easily. The best part is that regular use of this card and timely payments gradually build credit history and improve the CIBIL score. Therefore, today we will discuss FD-based credit cards. Along with this, we will learn: Expert: Rajshekhar, Financial Expert Question- What is an FD based credit card? Answer- FD based credit card- Question – If you have a normal credit card, why do you need an FD based credit card? Answer- Banks provide FD based credit cards when a person is not eligible for a normal credit card. Question- Who can get an FD-based credit card, and who is it useful for? Answer- FD based credit card is designed for people who find it difficult to get regular credit cards. It’s also for those who are getting a credit card for the first time. In this, the bank issues the card along with a fixed deposit (FD). Therefore, its approval is easier and the risk remains low for the bank. Question- How is an FD based credit card made, what is its process? Answer- Getting an FD based credit card is a very easy and convenient process. First, you need to submit an application at the bank branch. You can also apply online by visiting the bank’s website. There you need to select the FD based credit card option. After this, you need to open an FD in the bank according to your credit limit requirement. The bank issues a credit card based on this FD. Generally, these cards are available on FDs ranging from minimum Rs 10,000 to Rs 20,000. See the complete process in the graphic- Question- What are the benefits if we get an FD based credit card? Answer- FD based credit card is a good option for those who don’t have a credit history or have a low credit score. Question- What are the disadvantages if you get an FD based credit card and are unable to pay? Will the credit score still be affected? Answer- If the FD based credit card bill is not paid on time, there will definitely be losses. Question- When my credit score was poor, I got an FD-based credit card. Now that my credit score has improved, do I still need to keep money locked in FD? Answer- If your credit score has improved now, it’s not necessary to continue with the FD-based card.