A survey conducted by the oldest credit bureau of the country TransUnion CIBIL found that 74% of its respondents checked their CIBIL score only twice a year. With such restrained financial knowledge and an even limited idea about the habits that could strengthen or weaken their CIBIL score, a poor credit score is a common issue faced by all.
Since the credit score of individuals is a reflection of their creditworthiness, it has a crucial role to play in availing of credits. Therefore, holding a below 750 credit score is a definite hurdle in case one plans to avail a loan or a credit card.
In cases of those having a poor credit score but possessing a fixed deposit, multiple reputed financial institutions now offer secured cards or a credit card against FD.
Tips to avail credit card against an FD
Since such payment cards involve a mortgage in the form of a fixed deposit against which the credit limit is offered, lenders are not stringent about the required credit score. It is because they have the reassurance of repayment via liquidation of the collateral in case of defaults.
Considering that such secured credit cards are rapidly gaining ground among potential cardholders, one needs to compare cards before settling upon one. All that they need to do is check up on the following pointers before deciding upon a credit card –
Tip 1: Look into the offered credit limit
In the case of a credit card against FD, reputed card issuing companies generally provide individuals with a credit limit that is 75-85% of the FD amount.
Tip 2: Look into your monthly financial obligations
Although availing a secured credit card is a convenient option considering that it requires nominal eligibility criteria, a potential applicant must look into their –
- Required credit limit
- Existing financial obligation
It ensures that individuals have the nominal repayment capability that leads to a lender being more willing to offer the payment card.
Tip 3: Check the provided credit card benefits
Keeping in mind the convenience of cardholders, multiple variants of credit cards have been launched as per their varying spending pattern. With a suitable variant, holders can make the most of their availed card via reward points that can be redeemed against cashback, discounts , etc. Thus, they need to look into the offered credit card benefits before settling upon a card.
Alternatively, instead of availing multiple cards that serve varying spending habits, one can avail the 4-card-in-1 card – Bajaj Finserv RBL Bank World Plus SuperCard that acts as a credit card, loan card, EMI card and cash card.
Acquiring such cards requires one to provide minimum documentation and approaching this reputed NBFC provides pre-approved offers. Pre-approved offers streamline the application process to avail credit cards and help applicants save time. These offers are available on numerous financial products, viz. business loans, personal advances, home loans, etc.. You can take a look at your pre-approved offers by providing a couple of essential details like your name and contact number.
Tip 4: Watch out for the maturity date of the FD
Considering that the credit limit offered in case of a credit card against FD is based on the amount in the FD, the best time to avail a secured payment card is when it is approaching its maturity. It is because, towards the end of the maturity, the corpus of an FD receives a substantial boost. It ensures that one has a higher credit limit that can be used to sponsor diverse expenses.
Following up with such tips before availing a secured credit card ensures that a potential cardholder can settle upon a card that will help them make the most out of it. Additionally, with the best variant and timely payments, you can use a credit card to improve your credit score.