What is Secured Credit Card?
A secured credit card against a fixed deposit (FD) is a type of credit card where the credit limit is backed by a fixed deposit held with the issuing bank. It is commonly offered to individuals with no or low credit scores, as it reduces the bank’s risk by using the FD as collateral. The credit limit is typically 80% to 100% of the FD amount, and the cardholder continues to earn interest on the FD. This type of card helps in building or improving credit history, and is easier to obtain since it usually does not require income proof. If the cardholder defaults, the bank can recover the dues by liquidating the FD.