When choosing a credit card, applicants may come across both FD-backed and regular credit card options. Although both can be used for everyday purchases and offer access to credit, they differ in areas such as eligibility, security requirements, and approval criteria. Understanding these key differences can help applicants decide which type of card may be more suitable for their financial needs.
A credit card against FD provides access to credit by using a fixed deposit as collateral, while an regular credit card does not require any collateral and is generally issued based on factors such as the applicant’s income, credit history, and eligibility criteria. For individuals planning to apply for a credit card, understanding these differences is important when selecting a suitable product.
Understanding FD-backed credit cards
A credit card against FD is issued against a fixed deposit maintained by the issuing bank. The fixed deposit acts as security, helping reduce the lender’s risk.
Key characteristics include:
- Fixed deposit serves as collateral
- Simplified approval process
- Suitable for first-time credit users
- Supports credit history building
- Encourages responsible credit usage
Many applicants choose a credit card against FD when they have limited credit history or do not meet conventional eligibility requirements.
What is an regular credit card?
An regular credit card is a credit card that does not require any form of security or collateral.
Eligibility is typically assessed based on factors such as:
- Credit score and credit history
- Income
- Employment status
- Other eligibility criteria set by the issuer
Because there is no collateral to reduce the lender’s risk, regular credit cards may have stricter eligibility requirements than FD-backed credit cards.
Key differences between the two
| Feature | Credit Card Against FD | Regular Credit Card |
| Security type | Backed by a fixed deposit | Based on creditworthiness and eligibility |
| Structure | Secured against an FD | Issued without security or collateral and based on card eligibility |
| Credit-building potential | Available | Available |
| Accessibility | Often suitable for first-time users or those with limited credit history | Depends on credit profile and issuer criteria |
| Approval process | Usually linked to an FD relationship | Based on factors such as income, credit history, and issuer eligibility criteria |
This comparison highlights that a FD credit card is backed by a fixed deposit, while an regular credit card does not require collateral and is generally issued based on the applicant’s creditworthiness and eligibility.
Why many applicants choose credit cards against FD
Several factors contribute to the popularity of FD-backed cards.
Benefits may include:
- Easier eligibility requirements
- Credit-building opportunities
- Access to digital payments
- Responsible credit management
- Financial flexibility
For individuals looking to apply for a credit card for the first time, FD-backed options like the FIRST WOW! and Quantum+ Credit cards by IDFC FIRST Bank can provide structured access to credit usage.
IDFC FIRST Bank FIRST WOW! Credit Card against Fixed Deposit
The IDFC FIRST Bank FIRST WOW! Credit Card is a secured credit card issued against a fixed deposit, making it an accessible option for customers looking to build or strengthen their credit profile.
Some key features include:
- Issued against a fixed deposit with no documentation required
- Fully digital application journey
- Lifetime free credit card with ₹0 joining and annual fees
- Zero forex markup on international spends
- Up to 4X Reward Points on eligible spends
For customers looking to apply for a credit card while building their credit history, the IDFC FIRST WOW! Credit Card combines the security of an FD-backed card with features designed for everyday and international spending.
IDFC FIRST Bank FIRST Digital RuPay Credit Card with Quantum FD
Customers considering an FD-backed card for everyday and UPI spends may also explore the IDFC FIRST Bank FIRST Digital RuPay Credit Card with Quantum FD.
Key features include:
- Up to 2% cashback on everyday spends
- Zero joining and annual fees
- UPI-ready card with 1% cashback on UPI spends via the bank app
- Issued against a fixed deposit with no documentation required
- Fully digital application journey
Which option should you choose?
| Consideration | FD-Backed Credit Card | Regular Credit Card |
| Existing fixed deposit | Suitable | Not required |
| First-time credit usage | Often suitable | Depends on credit profile and issuer criteria |
| Credit-building objective | Suitable option | Suitable option |
| Simplicity | Typically, straightforward | Varies by issuer |
| Convenience | Often streamlined | Depends on eligibility and provider |
The choice between an FD-backed credit card and a regular credit card depends on factors such as an individual’s existing financial relationship with the bank, credit history, eligibility, and overall credit goals.
Those who are new to credit may find FD-backed cards easier to access, while applicants with an established credit profile may qualify for a wider range of regular card options.
Conclusion
A credit card against FD and an regular credit card both provide access to credit, but they differ in how they are issued. A credit card against a fixed deposit uses the FD as security, while an regular credit card does not require collateral and is generally issued based on the applicant’s credit profile and eligibility. For individuals planning to apply for a credit card while establishing or strengthening their credit history, understanding these differences can help identify the most appropriate option for their financial needs.
FAQs
What is a credit card against FD?
A credit card against FD is a credit card issued against a fixed deposit maintained by the issuing bank.
How is a credit card against FD different from an regular credit card?
A credit card against FD uses a fixed deposit as collateral, while an regular credit card does not require collateral and is generally issued based on the applicant’s credit profile and eligibility.
Why do banks issue credit cards against fixed deposits?
The fixed deposit reduces lender risk and can make credit access more accessible for eligible applicants.
Can an FD-backed credit card help build credit history?
Yes. Responsible usage and timely repayments may contribute positively to credit profile development.
Who should apply for a credit card against FD?
First-time credit users, individuals with limited credit history, and applicants seeking secured credit solutions may find these cards suitable.
ThePrint BrandIt content is a paid-for, sponsored article. Journalists of ThePrint are not involved in reporting or writing it.