Credit Cards Without Fixed Deposit: A Comprehensive Guide
Credit cards nowadays have become almost indispensable in the fast-moving life for the management of finances, cashless transactions, and benefits that can be availed only through credit cards. With many, acquiring a credit card with a fixed deposit (FD) becomes daring because most people do not want to block their hard-earned saving. This is where credit cards without fixed deposits come into the picture; these cards offer financial freedom with no upfront deposit.
If you are salaried, self-employed, or even someone looking to build a credit score, this will be a guide for you in understanding everything about unsecured credit cards and their effective usage.
What Are Credit Cards Without Fixed Deposit?
An unsecured credit card is a type of credit card that does not require any fixed deposit. The applicant does not have to promise any collateral or FD against the card, which is quite different from secured credit cards where an applicant needs to make a fixed deposit to secure that card from lender risk. It provides credit based on your income, credit score, and repayment capacity.
These cards are intended for eligible customers of the bank who want credit without keeping a fixed deposit locked away with the bank. These cards would enable customers to enjoy all the benefits of cash back, reward points, or even EMI options like regular credit cards.
Eligibility for Credit Cards Without FD?
Not all applicants are eligible for unsecured credit cards. Below are some common eligibility parameters for such cards:
Age: Generally, applicants must belong to the age group of 18 – 65 years.
Income: Consistent source of income is really important to banks, which generally provide minimum income levels.
Credit Score: With an average score of 700 or above, a really good credit score increases the probability of getting approval.
Employment Type: Customers with a credit card can be salaried, self-employed, or even students with co-applicants.
For instance, a simple credit card can be made available to a salaried person earning ₹25,000 per month and having a credit score of 750.
Advantages of Using Credit Cards Without a Fixed Deposit
Unsecured credit cards have several advantages:
1. No Fund Blocking: Like the secured cards, these cards do not require you to lock your savings as collateral.
2. Access to Credit: These cards have a limit available only on the basis of your income and creditworthiness, which helps you to maintain both planned and additional expenses.
3. Reward Programs: Several credit cards without a fixed deposit provide reward points, cashback, and discounts on shopping, dining, and travel.
4. Credit Buildup: If used responsibly, these cards can build and improve your credit score.
5. Flexibility: These cards are comparatively more flexible than secured cards and may often have higher credit limits and perks.
Challenges Associated with Credit Card Without Fixed Deposit
Although they seem to be very convenient, credit cards without a fixed deposit do have certain challenges.
1. High-Interest Rates: They tend to have higher interest rates than their counterparts secured credit cards above.
2. Stringent Eligibility Criteria: Reliable income and a good credit score are often preconditions for applicants looking for unsecured credit cards.
3. Lower Credit Limits for Beginners: If you’re new to credit, banks might offer a lower initial credit limit.
4. Potential for Overspending: Without proper discipline, it’s easy to overspend, leading to financial strain.
How to Get an Unsecured Credit Card?
Getting an unsecured credit card is very simple as long as you fit into a certain category laid down by the banks. Here is a step-by-step guide:
1. Research and Compare: Check various cards in the market. Compare features like fees, interest rates, and rewards.
2. Eligibility Criteria: Check the eligibility criteria from the bank’s website for the credit card of your preference.
3. Obtain Documents: Prepare ID proof, address proof, and income proof (salary slips or IT returns).
4. Apply Offline or Online: Most banks will have an option where you can proceed to apply online by visiting their website. Otherwise, visit a branch.
5. Approval and Verification: The bank will validate your details into its system and approve the card if everything is fulfilled once you submit your application.
Tip: Ensure your credit score is good before making an application to increase your chances of getting one.
Top Banks Offering Credit Cards Without Fixed Deposit in India
Here are some popular options for unsecured credit cards in India:
1. HDFC Regalia Credit Card
The HDFC Regalia Credit Card is a premium card for the elite traveler who enjoys indulging in luxuries from time to time.
Key Benefits:
●Free access to domestic and international airport lounges through the Priority Pass.
●Earn 4 reward points on every expenditure of ₹150 that can be redeemed for tickets, hotel bookings, and many more gifts.
●Dining, dining benefits of up to 20% across associate restaurants in the Good Food Trail Dining Program.
●Insurance coverage related to travel, including air accident insurance.
●Zero liability on lost cards, if reported on time.
Best For:
●Globetrotters or frequent travelers-they will enjoy these lounge access premium travel benefits.
●High Spenders will enjoy the benefit of earning reward points on significant expenses.
●Approximately c. ₹2,500 annually (waived for high annual spending), best suited to those who have a taste for convenience and luxury.
2. SBI SimplySAVE Credit Card
SBI SimplySAVE Credit Card is a budget-friendly card for the everyday shoppers who wish to save on their regular expenses.
Key Features:
●Earn 10x reward points on dining, groceries, movies, and department store purchases.
●Standard purchases earn one reward point per ₹100 spent.
●Spend 2000 rs or more within the first 60 days then the welcome gift will be ₹500 cashback.
●Costly annual fee of ₹499, which can easily be waived if an individual spends more than ₹1 lakh annually.
●Giving an option to convert big-ticket purchases into easy EMIs.
Best For-
●Daily Shoppers: Maximize benefits on their everyday expenses, groceries, and dining.
●Moderate spenders: The waiver of the fee and the cashback benefits make it really affordable for regular spending patterns.
●This assures that all your daily expenditures can lead to savings with very low fees.
3. With Amazon Pay Credit Card by ICICI
Amazon members and non-members, primarily online shoppers, can subscribe to the ICICI Amazon Pay Credit Card and access pretty good cashback deals.
Key Highlights:
●For Prime members, 5% cashbacks on the purchases done on Amazon and 3% cashbacks for non-Prime members.
●2% Flat cashback for all purchases done on Amazon partnered merchants.
●Unlimited 1% cashback for all other transactions, with no cap on it.
●Zero joining or annual fee, making it free of cost credit card.
●Every billing cycle, automatic cashback is added to your Amazon Pay balance.
Best For:
●Better suited for regular shoppers in Amazon, creating the highest cashback rewards.
●Provide smooth cashback without any surprises in terms of hidden fees for purchases.
This will be a good card for cashing in on electronic mail transactions because it comes with that very solid, fee-free basis coupled with regular cashback incentives.
Alternatives for Those Without a Credit Score or Income Proof
If you’re new to credit or lack income proof, you can still access financial tools:
1. Beginner-Friendly Credit Cards: Some banks offer cards with relaxed eligibility requirements for students or first-time users.
2. Prepaid Cards: These cards work like debit cards but can help you transition to unsecured credit cards over time.
3. Add-On Cards: If a family member has a credit card, you can get a supplementary card linked to their account.
These options provide an excellent starting point for building your financial history.
How to Use an Unsecured Credit Card Responsibly
To make the most of your credit card without fixed deposit, follow these tips:
1. Pay Bills on Time: Avoid late fees and interest charges by clearing your dues on or before the due date.
2. Monitor Spending: Keep track of your expenses to ensure you stay within budget.
3. Limit Utilization: Use no more than 30% of your credit limit to maintain a healthy credit score.
4. Avoid Minimum Payments: Always pay the full amount due to avoid accumulating interest.
5. Leverage Rewards: Maximize benefits by using your card for categories that offer cashback or points.
Responsible usage not only prevents debt but also boosts your creditworthiness over time.
The credit card is freedom, convenience, and financial liberation; it is nothing except tying your money with yourself through a fixed deposit. The cards have certain drawbacks; higher interest rates will be included. Nevertheless, they are a perfect choice for an individual who has a stable income and history with good credit
By picking the right card, learning the terms, and responsible use will all lead to enjoying the advantages of cashless transactions, increasing your credit score, and a smoother financial journey. If you’re contemplating applying for one, do your research to find the best fit according to your needs..
FAQs
1. Is it possible to obtain a credit card without income evidence?
Certain banks do provide entry-level cards for students or individuals with co-applicants, regardless of income proof, at zero fees.
2. What would be the best credit card with no fixed deposit?
There is no single best credit card as it may depend on your spending habits. For example, the ICICI Amazon Pay Credit Card may be good for people who buy most of their things online while an HDFC Regalia would be most suitable for frequent travelers.
3. What if I do not qualify for an unsecured credit card?
Think about other routes such as secured credit cards, prepaid cards, or add-on cards.
4. Are there any hidden charges in unsecured credit cards?
Always read and understand the miscellaneous fees that will come with the card, such as annual charges and late payment fee, as well as foreign transaction fees.
If applied rightly, a new credit card without a fixed deposit is indeed one of the best financial tools into which you can weigh to help you manage your money in a better way. Initiate the process today by clicking here.