Credit cards are easily available to salaried individuals whose income is regular. Availing credit card for business people, housewife or individuals with poor credit score can be difficult as the credit card companies are cautious about repayment.

Credit card institution disburse credit cards on the basis of repayment ability, annual income, credit history loan repayment history.

Credit card against bank deposit can be a better idea for individuals who are in need of credit card.

Features of the Credit card against Fixed deposits

• The Credit limit will be 70-85 % of fixed deposit value, subject to maximum set by the bank. The percentage varies with bank.
• There will be an interest charged on the amount you avail on your fixed deposit.
• Individuals will have to open or avail the fixed minimum amount set by the bank.
• Some banks may charge annual and joining fees.

Here are few advantages and disadvantages before availing.

Advantages

• Some banks provide you with instant credit card.
• This option can be best when you do not want to break your FD as you are expecting the amount soon. As this will save you from interest rate fluctuation.
• There is no need to submit income proof, or any tax return document for availing credit card
• Credit history is not monitored. Best for individual who are having poor credit score.
• One can enjoy all the offers such as discounts, cash back offers without breaking along with grace period of 45 days to make payment.
• As the limit will be set, you will not shop more than the set limit.
• If the card usage is well planned, it can help you build your credit score.

Disadvantages

• Your FD amount will be locked.
• You will not receive the amount if you fail to make the payment on time. Only balance amount will be refunded.
• Less interest rate will be applicable on fixed deposit, as you will have to pay interest on the amount availed.
• The above means the depositor cannot break the FD as long as he holds the card.
• In case of default, it can dampen your credit score.