Don’t have a CIBIL score? Here's how a secured credit card can help you build it
Also Read: Seeking a loan with a poor CIBIL score? Here are 3 key tips to help you secure fundsIt is a type of credit card issued against the security of a fixed deposit. If you don't have a CIBIL score, you can open a new fixed deposit or offer an existing fixed deposit and ask the bank to offer you a secured credit card against it.The credit limit issued against a secured credit card depends on the fixed deposit amount.
A bank usually offers a credit limit equivalent to 75% to 90% of the fixed deposit amount. Some banks may offer a credit limit higher than this.The bank keeps the credit limit in this range so that the customer’s spending using the credit card is restricted.
The minimum FD amount requirement for the issue of a secured credit card may differ from bank to bank.Secured credit cards are useful for people who don’t have a credit score or a low credit score. They are useful for people with no income or low income.
For example, students or homemakers can go for a secured credit card as they don’t have an income source.
Also Read: How does a pre-approved loan influence your CIBIL score? MintGenie explainsThe bank marks a lien on the fixed deposit against which the secured credit card is offered. As a result, you will not be able to withdraw the fixed deposit amount (partially or fully) till you hold the credit card.
To withdraw the FD amount, you first need to close the credit card.When the fixed deposit matures, it is automatically renewed. The tenure is the same as the earlier one, and the interest rate is the prevailing rate at the time of renewal.Getting approval for a secured credit card is easier than getting an unsecured credit card or loan, as the bank has the FD as collateral.
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