Credit cards could be your best friend or your worst enemy depending on how you use it. It gives its users a predetermined credit limit that allows them to purchase items without making any form of payment, either cash, or cheque. The credit limit is decided by the financial institution issuing the credit card based on one’s monthly income and expenditure. It could be a risky venture for those who cannot regulate their spending.

There is another option for those who cannot trust themselves to pay their monthly credit card statement, or have the tendency to over spend. There are some financial institutions that issue credit cards against FD. If you miss paying any monthly installment, your FD will serve as security and will be used to pay the monthly bill. If your salary is on the lower spectrum and have difficulty meeting the criteria for credit card eligibility, this scheme could help you out. If you avail credit cards against FD, it will also help you to earn more credit scores.

Are Credit Cards against FD a risky venture?

You are likely to question the prospect of issuing a credit card in accordance with a secure FD fund. A Fixed Deposit is the least risky mode of saving money in a bank. It gives a secure high interest return after a few years of maturity. So, why would you mix up security and flexibility of tenure with a credit card?

A credit card will allow you to withdraw cash from an ATM with zero interest. It also allows you to make transactions abroad with no fees. If you are an investor, a credit card is a must, as it allows you to have higher purchase power. For people unable to afford a credit card for whatever reason, a credit card against FD is the best option.


An unpaid credit card bill could turn into a loan shark asking you to repay the amount you had withdrawn. If you can barely make ends meet in that month, a credit card statement bill is the last thing you need. A credit card against FD prevents you from missing any monthly credit card payments and maintains the credit score. It cuts the risk threat of credit cards, while allowing you to enjoy the benefits of both a fixed deposit and credit card.

Who would benefit from issuing a credit card against FD?

  • Although freelancing is an actual job that requires full time commitment, it is still viewed as an unsteady job, no matter how experienced and marketable someone is. They are not always issued a credit card by a bank, as their income is viewed to be unstable. 
  • If you are just starting out in your career in any field, there are chances that your income is on the lower side and you do not meet the criteria for credit card eligibility.
  • Income proofs like salary receipts are not always given to local suppliers, or those just earning from part time gigs. Local bakeries and thrift shops also do not have income proofs.

Signing off

The charges for getting a credit card against FD is nil. The fixed deposit continues to earn interest until maturity. The best part is that the interest rate is lower than unsecured credit cards. You also do not need an income proof to avail credit cards against FD. If you are a freelancer, or a budding business owner, looking to buy products, and are unable to provide tons of capital, this scheme is perfect for your dreams to take off!

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