Muthoot Capital Credit Card Against FD

What is a Muthoot Credit Card Against FD?

Customers can get a credit card against a fixed deposit maintained with the bank, where the FD acts as security for the card. The credit limit is usually offered between 75% and 90% of the deposited amount. Muthoot Capital does not officially offer or list any credit cards against FD on its website. Borrowers who want this option can look at similar options offered by banks or NBFCs in India.

Popular Credit Card Against FD Options Available

Here are some popular credit cards against FD options that customers can choose from:

Features of a Credit Card Against FD

A credit card against FD comes with simple eligibility and is mainly useful for customers who want easier access to credit. Here are some features that are common to these cards:

• Improve your credit score: Using the card frequently and paying the bill on time can help your credit history. This may be useful in increasing loan and card eligibility in future.
• No Income Proof: The fixed deposit works as security, such that the banks might not need the salary slips or the details of the income. This can simplify the process of applying to most of the customers.
• FD Interest: The fixed deposit normally continues to be active even after the linkage with the credit card. Customers can continue earning the FD interest rate on the deposit amount during the card tenure.

Should You Consider a Credit Card Against FD?

A credit card against FD helps customers secure approval quicker and build credit history quicker. You should know both advantages and disadvantages before applying for it.

Pros

• Easy approval: These cards are easily approved by most banks since they are secured by an FD.
• Fewer Income Documents: The fixed deposit serves as security, which is why the bank requires less documentation with secured credit cards than it does with others.
• Earn interest on fixed deposit: A fixed deposit earns interest as long as the credit card is active, according to the bank’s terms and conditions.
• Support future eligibility: Making repayment on time builds your credit history and may benefit your application for future loans and regular unsecured credit cards.

Cons

• Limited Credit Limit: Card limit varies according to the value of the fixed deposit.
• FD May Remain Blocked: Banks can retain the FD until the credit card is closed.
• Interest on Unpaid Dues: Interest charges can apply if bills are not paid on time.
• Less Premium Benefits: There are secured cards that can have lower rewards and benefits.
• Extra Charges: Some banks might charge joining fees or annual fees on the card.

Things to Consider Before Applying for a Credit Card Against FD

A credit card linked with FD can help in building credit history while protecting savings balance. Before applying, it is necessary to compare card features, charges, and FD-related conditions carefully.

• FD Lien and Withdrawal Rules: The fixed deposit is usually marked as security against the card. In many cases, you may not be able to withdraw or close the FD until the card is closed.
• Credit limit: Most of the banks provide a credit limit of 75 to 90% of FD value. A higher FD amount could help you receive a higher spending limit.
• Fees and Other Charges: Check for joining fees, annual charges, late payment penalties and card replacement fees before applying.
• Grace Periods: Some credit cards have a grace period in which the payments are not charged interest. Pay in full within that period to avoid interest charges.
• Billing Cycle and Repayment Terms: Understand the billing dates and repayment due dates you are given. Paying only the minimum is not sufficient and interest may accrue on remaining balance.

Eligibility or Documentation Requirements

Most banks have a minimum eligibility requirement for a credit card against FD. In general, the applicants need to provide a fixed deposit in the bank and fill out a simple KYC form.

Key Takeaways

A credit card against FD is a secured card that is pledged against a fixed deposit. Muthoot Capital Services does not offer an FD-backed credit card at present. Customers seeking this facility can find similar facilities with the banks where opening a fixed deposit or savings account may be part of the application process. One should compare the fees, FD requirements, credit limits, and card features before applying.