Ready to unlock the power of a Fixed Deposit (FD) backed credit card? It's a smart way to build or rebuild your credit score while enjoying the benefits of a credit card. Let's dive into the step-by-step process of applying for one!
Step 1: Express Your Interest and Check Eligibility
Are you intrigued by the idea of a secured credit card? The first step is to express your interest to the bank where you hold or plan to open a Fixed Deposit. Not all banks offer FD-backed credit cards, so it's crucial to start with institutions you already have a relationship with or those known for this product.
Sub-step 1.1: Contact Your Bank
Reach out to your existing bank through their customer care, website, or by visiting a branch. Inquire about their offerings for credit cards against Fixed Deposits.
Sub-step 1.2: Understand the Basic Eligibility Criteria
While the primary security is your FD, banks might have some basic eligibility criteria, such as:
- Age: You usually need to be at least 18 years old.
- FD Amount: Banks will specify the minimum FD amount required to be eligible for a credit card. This amount often dictates the credit limit you'll receive (typically a percentage of the FD value, like 75-90%).
- Existing Customer Status: Some banks might prefer or require you to be an existing FD holder.
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| How To Apply Fd Credit Card |
Step 2: Open a Fixed Deposit (If Necessary)
If you don't already have an FD with the bank offering the credit card, you'll need to open one.
Sub-step 2.1: Choose the FD Amount and Tenure
Decide on the amount you wish to deposit. Remember, this will influence your credit limit. Also, consider the tenure of the FD. The bank might have specific requirements regarding the FD tenure for a credit card.
Sub-step 2.2: Complete the FD Application Process
Fill out the necessary forms, provide KYC (Know Your Customer) documents (like your ID and address proof), and deposit the funds. Ensure you understand the terms and conditions of the FD.
Step 3: Initiate the Credit Card Application
Once your FD is active, you can formally apply for the credit card.
Sub-step 3.1: Obtain the Application Form
You can usually get the credit card application form from the bank's website or by visiting a branch.
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Sub-step 3.2: Fill in the Application Form Carefully
Provide all the required details accurately. This typically includes your personal information, FD details, and contact information.
Sub-step 3.3: Attach Required Documents
Along with the application form, you'll likely need to submit copies of:
- Your KYC documents (ID and address proof).
- Proof of your Fixed Deposit.
- Any other documents the bank might require.
Step 4: Submit the Application and Await Approval
After completing the application and gathering all documents, submit them to the bank.
Sub-step 4.1: Choose the Submission Method
You can usually submit the application in person at a bank branch or sometimes online, depending on the bank's processes.
Sub-step 4.2: Track Your Application Status
Most banks provide a reference number or a way to track the status of your credit card application. Keep this handy and follow up with the bank if needed.
Step 5: Receive and Activate Your Credit Card
Once your application is approved, the bank will dispatch your credit card to your registered address.
Sub-step 5.1: Card Delivery
Keep an eye out for the delivery of your credit card. It usually comes in a sealed envelope.
Sub-step 5.2: Card Activation
Upon receiving your card, you'll need to activate it. Banks offer various activation methods, such as:
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- Calling a toll-free number.
- Logging into your online banking portal.
- Using the bank's mobile application.
- Following the instructions provided with the card.
Step 6: Understand Your Credit Limit and Terms
Before you start using your card, it's crucial to understand its features and terms.
Sub-step 6.1: Credit Limit
Your credit limit will be directly linked to the amount in your Fixed Deposit, typically a percentage of it. Be aware of this limit.
Sub-step 6.2: Interest Rates and Fees
While FD-backed cards are secured, they still come with interest rates if you don't pay your dues on time. Understand the annual percentage rate (APR), late payment fees, over-limit fees, and other charges.
Sub-step 6.3: Billing Cycle and Payment Due Dates
Familiarize yourself with your card's billing cycle and payment due dates to avoid interest charges and maintain a good credit history.
Step 7: Use Your Credit Card Responsibly
Using your FD-backed credit card responsibly is key to building a good credit score.
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Sub-step 7.1: Make Timely Payments
Always pay your credit card bills in full and on time. This demonstrates responsible credit behavior.
Sub-step 7.2: Stay Within Your Credit Limit
Avoid exceeding your credit limit, as this can lead to over-limit fees and negatively impact your credit score.
Sub-step 7.3: Monitor Your Credit Card Statements
Regularly review your credit card statements for any discrepancies or unauthorized transactions.
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Step 8: Review and Potentially Upgrade
As you use your FD-backed credit card responsibly and build a good credit history, the bank might offer you an upgrade to a regular, unsecured credit card with a higher credit limit and better rewards.
Sub-step 8.1: Track Your Credit Score
Keep an eye on your credit score. A good credit score opens up more financial opportunities.
Sub-step 8.2: Inquire About Upgrade Options
After a period of responsible usage, inquire with your bank about potential upgrade options.
Step 9: Closure of FD and Credit Card
When you decide you no longer need the FD-backed credit card, you'll need to follow a specific procedure for closure.
Sub-step 9.1: Inform the Bank
Notify the bank of your intention to close the FD and the associated credit card.
Sub-step 9.2: Follow the Bank's Instructions
The bank will guide you through the process, which might involve submitting a written request and settling any outstanding dues on the credit card.
Sub-step 9.3: FD Maturity/Closure
Once the credit card is closed and all dues are cleared, your Fixed Deposit will either mature as per its original tenure or be closed prematurely as per your request and the bank's policies.
Step 10: Learn from Your Experience
Using an FD-backed credit card is a valuable step in understanding and managing credit. Take the lessons learned and apply them to your future financial endeavors.
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Frequently Asked Questions (FAQ)
How to check eligibility for an FD credit card?
Quick Answer: Contact your bank or visit their website to inquire about their FD-backed credit card offerings and their eligibility criteria, which usually involves having or opening a Fixed Deposit of a certain amount.
How to open a Fixed Deposit for a credit card?
Quick Answer: Visit your preferred bank, fill out the FD application form, provide KYC documents, and deposit the required amount. Inform the bank that you intend to apply for a credit card against this FD.
How to apply for an FD-backed credit card online?
Quick Answer: Check if your bank offers online application for FD-backed credit cards through their website or mobile app. The process usually involves logging in, selecting the credit card option, and providing the necessary details.
How to know the credit limit on an FD credit card?
Quick Answer: The credit limit is typically a percentage (e.g., 75-90%) of your Fixed Deposit amount. The bank will inform you of your specific credit limit during the application process and on your card statement.
How to activate an FD credit card?
Quick Answer: Follow the instructions provided with your credit card, which may involve calling a toll-free number, logging into your online banking, or using the bank's mobile app.
How to make payments on an FD credit card?
Quick Answer: You can make payments through various methods like online banking, mobile apps, auto-debit from your bank account, or by visiting a bank branch.
How to improve the credit limit on an FD credit card?
Quick Answer: Since the credit limit is tied to your FD amount, the primary way to increase it is by increasing the amount in your Fixed Deposit, subject to the bank's policies.
How to close an FD credit card?
Quick Answer: Inform your bank about your intention to close the card and the associated FD. Follow their instructions, settle any outstanding dues, and submit a closure request.
How to get a regular credit card after using an FD credit card?
Quick Answer: Use your FD-backed card responsibly by making timely payments and maintaining a good credit score. After a period, inquire with your bank about upgrading to an unsecured credit card.
How to use an FD credit card responsibly?
Quick Answer: Always pay your bills in full and on time, stay within your credit limit, and regularly monitor your credit card statements for any discrepancies.
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