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Fixed deposit-backed credit cards offer a solution for individuals with no or low credit scores, as the FD acts as collateral for the bank. These cards provide quick approval with a credit limit typically 75-90% of the FD value, while cardholders continue to earn interest on their deposit.Income Tax GuideIncome Tax Slabs FY 2025-26Income Tax Calculator 2025New Income Tax Bill 2025Benefits of fixed deposit backed credit cards1. FD-backed credit cards are issued against a fixed deposit; the FD serves as security for the bank.2. It is easy to get a quick approval and suitable for people with no/low credit score since the bank’s risk is covered.3. The credit limit is much lower and typically about 75–90% of FD value.4. One still earns FD interest while using the card; default risk is adjusted against the FD.5. The FD is generally locked for the card’s tenure and one can’t break it without clearing card dues.Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
