Banks typically provide maximum credit limits ranging between 70-90% of the fixed deposit amount as collateral. According to reports from Personal Finance News, for instance, if you maintain an FD of ₹1,00,000 with a financial entity, you may be eligible for a credit limit between ₹70,000 - ₹90,000, based on the bank's terms and conditions. The underlying FD continues to earn interest at a pre-decided rate while serving as collateral for the secured credit line.
These secured credit cards are designed for individuals seeking a secure credit line who may not have a fixed income source or are looking to build credit score. As reported by Personal Finance News, the ideal candidates include newcomers to the credit system, freelancers, students, and senior citizens. Banks issue these cards with minimal documentation and paperwork, requiring no income or employment proof, making them accessible to various user segments. The cards are particularly beneficial for first-time users, low/no credit score individuals, and those with no prior credit history, as they offer near-guaranteed approval regardless of employment status.
Proper usage of these cards can significantly improve credit behavior and enhance credit scores. According to reports from Personal Finance News, if users make timely repayments, maintain low credit utilization ratios, and continue using the same card for longer periods, their credit behavior will be reported to credit bureaus, helping build or enhance their credit score. Banks report all repayment activity to CIBIL monthly, and consistent on-time payments can show measurable score improvement within 6-12 months. Keeping credit utilisation below 30% of the limit accelerates this process further. However, if default occurs on due payments or interest, banks have the right to recover amounts using the credit card security deposit, which is the underlying FD.
SBI Card Unnati offers credit cards against a minimum FD amount of ₹25,000 with no joining or annual fees for the first 4 years, then charges of ₹499 per year from the fifth year. IDFC FIRST WOW Credit Card provides secured credit cards with a minimum FD amount of ₹20,000, offering credit limits up to 100% of FD value, along with 4X reward points and zero forex markup on international spending. Kotak 811 #DreamDifferent is a lifetime free secured credit card requiring a minimum FD of ₹10,000, offering 1% cashback on all spends and waiving annual fees permanently. Axis Bank's Insta Easy card requires a minimum FD of ₹15,000 with a low annual fee of ₹500, offering 1% cashback on all retail spends and fuel surcharge waiver.
Applications can be submitted through the bank's digital banking or mobile app channels, such as at Axis Bank and HDFC Bank. As reported by Personal Finance News, the process involves identity verification using Aadhaar and PAN, selecting the FD amount and credit card with specified credit limit requirements, providing personal information including residential address and email ID, and completing the transaction via KYC video call with the bank's authorized agent. The application process is comprehensive, requiring Aadhaar card, PAN card, Passport, Voter ID or Aadhaar, utility bill, Passport depending on the bank's requirements, along with recent passport-sized photograph.
