How is FD Credit Card different from Regular Credit Card?

The key difference between an FD credit card and a regular credit card is: - Regular (unsecured) Card: Bank gives you credit card based on your credit profile - FD-backed Card: You open a Fixed Deposit (FD) and the bank offers you a credit card keeping your deposit as collateral

FD Credit Card vs. Regular Credit Card Comparison

Parameter	FD Credit Card (Secured)	Normal Credit Card (Unsecured)
Eligibility	Students, Businesspersons, homemakers, new-to-credit individuals – all can apply	Only offered to salaried/self-employed individuals with good credit and stable income
Chances of Approval	Very high (even with a poor credit score)	Varied from applicant to applicant
Collateral	Yes, fixed deposit with bank	No collateral needed
Credit Limit	80-100% of the FD amount offered as credit limit	Depends on income and credit profile of the applicant
Benefits	Usually, basic benefits like a decent reward rate & discount with popular brands	Better value-back via rewards/cashback/discount + added perks like lounge access, membership, etc.

FD Credit Cards are great for:

Students
Business Owners
Homemakers
New-to-credit individuals
Individuals with bad credit score

Why are FD Cards a good option?

Guaranteed approval despite low or no credit score
Can start with a small FD; some banks start with even Rs. 5,000
Get ~90% of FD amount as credit limit (So, Rs. 50K FD >> Rs. 45K credit limit)

Note that if you cannot repay the amount spent on your card timely, it will have a negative effect on your credit score. And if you continue for several months and default on the payment, bank can forfeit your FD.

Pro-tip for beginners who can’t get a normal card:

Start with an FD credit card >> build score with disciplined usage for 6-12 months >> upgrade to normal credit card with better, more focused benefits.

FAQs

Banks usually offer up to 90% of the FD amount as credit limit, with some issuers offering 100% of the FD amount as limit on your card.

Yes, FD Credit Cards offer rewards/cashback on spends, just like regular credit cards. FD Cards on RuPay network can also be linked to your UPI apps and you can earn value-back on everyday UPI spends. Some FD-backed cards like IDFC FIRST WOW Black and Tata Neu Infinity Secured Card come with higher reward rates along with perks like lounge access, complimentary memberships, movie discount, etc.

Yes, FD Credit Cards are one of the best ways to start your credit journey or repair a bad credit score. Just like regular cards, timely payments and responsible credit usage on FD credit cards help in improving your credit score.

If you do not clear your FD credit card dues on time, it is reported to the credit bureaus and late payment charges + finance charges apply on your card. If you fail to pay your bills for several months, it leads to a significant drop in your credit score. In case of default, bank can recover the dues using your FD amount.

No, since your FD stands as collateral, you can withdraw your FD only after clearing all your dues and closing your card.