New Delhi, Sept. 25 -- An FD-backed credit card is a financial tool directly linked to a fixed deposit (FD). The FD, in this case, acts as collateral and helps the credit card holder secure a credit limit. This way, FD-backed credit cards provide applicants with a safer borrowing experience in comparison with unsecured credit cards.

This kind of credit card is especially useful for those individuals who have limited or no credit history. The primary objective of lending institutions with such credit card products is to keep themselves safe by issuing loans only after confirming with the respective banks about the solid fixed deposit collateral, because without such collateral, no fixed deposit-backed credit card can be issued.

When you ...