FD-backed credit cards are different from traditional credit cards. Those who fail to get credit cards approved can opt for secured credit cards that come with the following features:

100% Approval: As secured cards are issued against FDs, the approval of the credit card is guaranteed even if you have a poor credit score

Less/No Documentation: Secured credit cards require less or no paperwork or submission of documents as details are pre-fetched from the existing FD

Instant Credit Card: In most cases, cardholders get to use these credit cards instantly as the provider issues a virtual credit card as soon as the FD is booked.

Up to 100% Credit Limit: Most banks offer fd-backed credit cards with a credit limit of 80%-100% of the FD amount. Cardholders can also increase their credit card limit by making additional deposit amounts.

Helps in Building Credit History: People with no or low credit score can use this credit card to build or improve their credit score. A good credit score can help in getting credit applications approved without much difficulty in the future.

Interest on FD: Cardholders can use the credit card for expenses and keep on earning interest on FDs as usual at the same time.

Quick and Easy Process: Credit cards against FD do not require additional inquiries of your credit history. It makes them a preferred choice for people who want to build up their credit.

Customized Fixed Deposit Amount: The amount of fixed deposit is quite affordable as it varies from Rs. 10,000 to Rs. 65,000. Consumers who wish to rebuild their credit can begin with a small FD to avail a secured credit card.

FD-backed credit cards can be a good choice for the following:

• Individuals with entry-level jobs
• Retired people with no regular income
• Individuals to whom banks are not offering unsecured cards
• Individuals who do not have income proof, but need a credit card
• Individuals who have a poor credit score and want to rebuild their credit

To apply for a secured credit card from Paisabazaar, follow the steps given below:

• Enter your mobile number and verify with OTP
• Check the credit card offers available on your profile
• Choose a secured credit card
• Provide additional KYC details like PAN, Aadhaar, etc.
• You will be redirected to the respective issuer’s website where you need to open a Fixed Deposit
• Once approved, your credit card will be delivered to your registered mailing address within 5-7 working days

Consumers can build credit by ensuring responsible usage on their secured credit cards. Here are few practices to follow:

Pay Your Dues Timely: Repayment history has the highest impact on your credit score. If you do not make your bill payments on or before the due date, it shows up in the Days Past Due (DPD) section of your credit report and negatively affects your score. Hence, always pay your dues timely.

Pay Total Amount Due: While paying minimum due helps you avoid negative impact on your credit profile, the remaining amount starts attracting finance charges and new transactions will also be ineligible for the interest-free period. This can lead to a debt spiral and add to your debt, ultimately affecting your credit health.

Maintain Low CUR: Credit Utilization Ratio (CUR) shows the percentage of your total credit that you are currently using. A low CUR indicates lower dependency on credit and works in favour of your score. Hence, you should try not to exhaust the entire available limit on your card and maintain a low to moderate CUR.

Avoid Cash Withdrawal: When you withdraw cash from an ATM using your credit card, interest charges start accruing from the first day. Such transactions also make your new spends ineligible for the free credit period, which can again start a debt spiral.