Bandhan Bank Credit Card Against FD

What is a Credit Card Against FD?

A credit card against FD is a secured credit card issued against a fixed deposit maintained with a bank. The FD amount works as security, and the credit limit is around 75% to 90% of the deposit value. These cards generally include online shopping, ATM cash withdrawal, reward points, and several bill payment options.

At present, Bandhan Bank does not officially offer a credit card against FD. Deposit holders may consider FD-backed credit card facilities offered by other public sector banks, private banks, and small finance banks or NBFCs across India.

Popular Credit Card Against FD Options Available

The table below highlights some popular credit cards against FD options available in India:

Features of Credit Card Against FD

Some common features of credit cards against FD are given below:

• Easier Approval Process: Banks generally provide easier approval because the fixed deposit reduces the lending risk.
• Continued FD Interest Benefits: The fixed deposit generally keeps earning interest during the card tenure under the bank’s applicable FD interest rate.
• Add-on Card Facility: Some issuers give the option to apply for an extra card for close family members. These cards remain linked to the main account of the primary holder.
• EMI Conversion Option: If a large amount is spent at once, a few banks allow that payment to be divided into smaller monthly instalments instead of paying the full amount together.
• International Usage Facility: Certain FD-backed credit cards can also be used outside India for online or overseas payments, although this depends on the bank’s terms and the type of card issued.

Should You Consider a Credit Card Against FD?

A credit card against an FD may work well for easier approval and for building a credit record. Even then, reviewing the advantages and the drawbacks carefully remains important before application.

Pros

• Quick Approval: Approval can be easier, even without a proper credit repayment history.
• Credit Score Support: Regular card payments may support the improvement of the CIBIL score over time.
• Continued FD Benefits: The fixed deposit continues to earn interest during the whole card period.
• Lower Interest Charges: Interest charges may be lower sometimes compared to the unsecured credit cards.
• Flexible Credit Limit: The credit limit may increase if the FD amount is increased.

Cons

• Blocked Deposit Amount: The fixed deposit remains blocked until your card is closed.
• Limited Spending Capacity: The spending limit may depend on a percentage of the fixed deposit amount value.
• Risk of FD Recovery: The bank may recover unpaid dues from the fixed deposit in case of default.

Things to Consider Before Applying for a Credit Card Against FD

Some important points to consider before applying for a credit card against FD are explained below:

• Billing Cycle: This is the monthly period during which all card transactions are recorded. Once the cycle finishes, the bank provides a statement listing total due amount and payment date clearly.
• Interest-free Grace Period: Credit cards allow a time period during which no interest is charged on new purchases. This benefit is applicable when full bill amount is paid before the due date limit.
• Credit Utilisation Ratio (CUR): The Credit Utilisation Ratio shows how much of the available credit limit is being used. Financial experts generally recommend keeping the CUR below 30% to maintain a healthy credit score.
• Late Payment Charges: If the payment is not made by the due date, the bank may charge a late payment fee. Regular delays may also affect the credit score negatively.
• Credit Limit Determination: The credit limit offered on a credit card against an FD mainly depends on the deposit value. The bank may also review a few points before deciding the final approved limit.

Eligibility or Documentation Requirements

The eligibility conditions and required documents for a credit card application may differ from one bank to another. Some basic requirements are given below.

Note: Eligibility and document requirements may vary across banks and card issuers. Applicants should check the official terms before applying.

Key Takeaways

A credit card against FD is a secured credit facility where the credit limit is generally 75% to 90% of the fixed deposit value. These cards are generally chosen by applicants seeking simple approval and support for credit history growth. Bandhan Bank does not officially provide this facility at present. Customers may explore FD-backed credit card facilities available through other banks in India.