Credit cards are great financial tools for consumers. They enable you to make purchases and pay later. However, some people find it difficult to acquire credit cards. Is your credit card application rejected? Don't worry! you can apply for one against your fixed deposit.
What Are The Reasons For My Credit Card Application To Get Rejected?
There are various other reasons for credit cards getting rejected apart from a bad credit score. The different reasons for which your credit card application is rejected are as follows:
- Inconsistent work history: if you do not stick around in a job for more than a particular period, then banks and lending institutions will not trust your creditworthiness.
- Low income: If your income is too small to pay credit card bills, then your credit card application gets rejected.
- Multiple applications for credit cards: Lenders will think that you are too much in need of credit and you cannot pay your bills on time.
- No credit history: If you have no debt history, then lenders cannot evaluate your creditworthiness.
What Can You Do When A Credit Card Application Is Rejected?
Those with a rejected credit card application can apply for a credit card against your fixed deposit. This is called a secured credit card.
Benefits Of Credit Cards Against Fixed Deposit
A credit card against your fixed deposit or a secured credit card works like any other credit card. It has a credit limit, billing cycle, pay-by date, expiry date, and so on. The benefits of a credit card against fixed deposit are:
- Lenders do not issue it based on your credit history or creditworthiness.
- It will mitigate the risk for the lender as it is issued against fixed deposits.
- Good credit behavior will make the lender convert the credit card against a fixed deposit to an unsecured one in the future.
- To apply for secured credit cards, you will need minimum documentation
- Ideally, banks provide an interest-free period of 48 days to 55 days on credit cards against fixed deposits.
- They come with a minimum tenure of 6 months.
- These cards come with several rewards to the consumers like reward points, cashback, etc.,
How To Apply For A Credit Card Against Fixed Deposit?
- Firstly, it is mandatory to have a fixed deposit account with the respective bank
- If you do not have one, visit the nearest branch to open an FD account
- After opening an FD account, you can apply for a credit card account with the same branch by filling up an application.
- You can also apply for a secured credit card online once your FD account is activated.
- Some credit cards are issued as complimentary for having an FD account with the bank.
- If you already have an FD account, then visit the bank’s website and apply online for the secured credit card.