Top Benefits of Using an FD Credit Card for Beginners

When you are beginning your financial journey, it becomes difficult to get a regular credit card if you do not have a credit history or have a bad credit score. That is where FD-backed credit cards can step in. A credit card against a Fixed Deposit (FD) is a smart and safe means of starting to enjoy the advantages of credit and, at the same time, establishing a strong financial footing.

These cards are based on your fixed deposit as collateral. Here is a thorough analysis of the main advantages that an FD credit card provides, particularly for new customers, so that they can apply for credit card online.

1. No Requirement of a High Credit Score

One of the most wonderful things about an FD credit card is that you do not need a pre-existing credit history or rating. Regular credit cards usually require a good credit score for approval, but with this one, that is not needed. Since your fixed deposit secures your credit card, the eligibility requirements are simple. This is perfect for students, young working professionals, or newcomers who are just starting out in their credit life.

2. Simple Approval Process

In general, getting a credit card against an FD is quick and easy. The procedure is made considerably easier if you already have a fixed deposit account. Most of the time, you may apply online, and you will receive your approval shortly after opening your FD. It is a simple choice for beginners because there is less paperwork to do.

3. Assists You in Building Up Credit Score

If you use your FD-backed credit card responsibly, it can make a big difference in building your credit history. Low consumption and prompt repayment provide good signals for the credit profile. This gradually raises your credit score, which eventually opens up more options like high-limit credit cards or loans.

4. Safe and Low-Risk Option

Since the card is issued against your FD, it provides financial security. The bank may take back the unpaid balance from your deposit if you are unable to make your payments. It is still crucial to utilise the card sensibly. The best aspect is that the deposit keeps earning interest, which means you are increasing your savings in addition to gaining access to credit.

5. Mobile Banking and Digital Access

Mobile banking services offered by most FD credit card banks are robust and safe. You can view your card, monitor your expenses, pay bills, and treat yourself to a secure and simple app or web-based interface. For new clients who have a good knowledge on technology, this is simple and convenient.

6. No or Low Annual Fees

FD backed credit cards usually come with an annual fee, AU’s NOMO Credit Card (FD backed Credit Card) has a one time Joining Fee of Rs.199. For a new consumer who has to use the facilities of a credit card at low expense, this is a big advantage offered by AU Small Finance Bank.

7. Easy Shift to Unsecured Credit Cards

Your credit record gets better when you use your FD credit card responsibly for a period and pay the entire balance on time. Your chances of obtaining other credit cards with better terms and bigger limits are increased by this record. In other words, the FD card serves as a stepping stone for more advanced credit instruments.

Closing Thoughts

For beginners, exploring the world of credit can be challenging. But with a credit card against FD, you receive a systematic and risk-free method of earning incentives, having financial flexibility, and establishing credit. It is a smart tool to improve your financial profile, develop appropriate credit habits, and get ready for a more secure future. This simple product has the potential to build a solid credit history over time.