“I believe in living a credit-free life!”
*suffers an unpredicted expense*
“I would like to take that statement back”
Most people would like to believe that they can manage to live a life without taking on credit. But is that a feasible mindset? The negative connotation linked with borrowing credit from financial institutions and NBFCs can repel away interested individuals. Many misconceptions are associated with credit cards, like debt cycles, high-interest rates, etc. However, these are conditional situations and not necessarily the same for everyone.
Also, avoiding financial products like credit cards and loans put people at a disadvantage. Contrary to popular belief, these products help build the CIBIL score. Most institutions prefer sanctioning loans and approving credit to individuals with a credit score of over 750. So, understanding such features can help build your financial credibility.
There are certain credit cards that don’t require you to have a high credit score or produce extensive documentation. Unlike unsecured credit cards that require verification via documents, a secured credit card serves as an alternative. They’re recommended for individuals with a low credit score or irregular income. Moreover, homemakers, entrepreneurs, and students can avail of such secured credit cards as well!
One of the most preferred type of secured credit cards is one availed against a fixed deposit. It offers investors a chance to access the necessary resources to finance sudden expenses without breaking the bank – quite literally in this case. Liquidating a fixed deposit could do more harm than good. You can pledge these funds without disturbing them and avail a credit card.
Keep reading on to learn more about the differences between regular credit cards and fixed deposit-backed credit cards, and click here to apply for one today!
While browsing the best credit card options available in the market, you might be confused about which type works best for you. Moreover, these choices might confuse those with fixed deposits that already contain a sizeable amount. Either way, it’s best to weigh the options before settling on one. Besides, it just might save you the trouble and expense of breaking a fixed deposit.
While most credit card companies prefer dealing with people who have a high credit score, others have lenient policies. Regardless, it’s important to understand that these companies sanction a pre-set credit limit. Once exhausted, you won’t be able to continue using the card without paying off the amount owed.
Also, these credit cards can be used to fulfil online and offline transactions. With every purchase, you might earn exciting rewards like cashbacks or rewards points. Before sanctioning the credit limit, issuers will scrutinise your credit score, payment history, income, etc.
Despite all the investments and emergency corpus, investors might find themselves in a financial pinch. Having a credit card against a fixed deposit is recommended for such situations. Moreover, these cards are easier to avail for those without steady incomes in comparison to traditional credit cards.
Banks will sanction up to 75% to 85% of the fixed deposit for credit card usage. So, the higher the amount deposited, the more likely you are to receive a card against it.
The bottom line? It’s best to apply for a credit card that best suits your requirements! If you need a credit card with a higher limit, then regular credit cards come with high pre-set limits. But, if you’re largely financially secure and only require them for payments, fixed deposit-backed credit cards are better.
So, what are you waiting for? Start building a mighty credit score today by applying for a credit card on the Bajaj Markets app or website!