It is essential to have reliable funding sources available during uncertain financial times. The FD (Fixed Deposit) credit card is one such lifeline. How? Simply because it offers instant access to funds based on the amount you deposit. Here are some tips on making the most of this secured credit card during emergencies.
Understanding FD Credit Cards
This is a secured card offered against a fixed deposit you hold with the issuer. The limit is equal to the amount you deposit. These cards offer a low-risk way to build or repair your credit score. You can still enjoy the usual benefits of a credit card.
This card type is ideal for those with a low credit score or no credit history because it allows them to access credit card benefits effortlessly. You can switch the card to an unsecured format by paying bills on time.
Benefits of FD Credit Cards in Emergencies
Getting a secured credit card is a simple and hassle-free process, as the risk to the issuer is comparatively lesser. If you default on your credit card bill payments, the issuer can liquidate your FD to recover the unpaid amount.
Here are a few benefits you get to enjoy with FD credit card:
Provides Instant Access to Funds
Personal loans require lengthy approval, which can take time. This card allows you to instantly tap into your credit line, which can be a lifesaver in emergencies.
Have Lower Interest Rates
Since the card is secured against your fixed deposit, issuers offer lower interest rates than unsecured credit cards. This can significantly reduce the cost of borrowing during an emergency.
Helps Build Your Credit Score
An FD credit card can boost your credit score, helping you build a positive credit history. You can demonstrate financial responsibility by making on-time payments and lowering your credit utilisation. This helps you achieve a higher score over time.
Offers a Higher Credit Limits
The credit limit is based on the amount you deposit. A higher sum translates to a better limit. So, you can book an FD with a significant sum, helping you address financial emergencies without hassles.
Helps You Get Easy Approval
The bank holds your fixed deposit details, so an FD credit card involves minimal documentation. This makes the process quick and hassle-free.
How to Use an FD Credit Card Effectively
Here are some tips for using your credit card during an emergency:
- Assess Your Needs: Before using your FD credit card, evaluate the financial requirements. Determine how much you need and ensure it fits within your credit limit.
- Prioritise Expenses: Use your FD credit card for essential expenses only. Only pay for necessities like medical bills, utility payments, and critical repairs to avoid overutilising your credit limit.
- Keep Track of Your Spends: Monitor your credit card transactions to ensure you stay within your budget. This helps avoid unnecessary debt accumulation.
- Make Timely Payments: Make at least the minimum payment on your credit card bill to avoid penalties and interest charges.
- Utilise Interest-free Periods: Most credit cards offer an interest-free period on purchases. Take advantage of this by planning your expenses and repaying the amount within this period to avoid interest charges.
Tips for Maximising Benefits of FD Credit Cards
Here are some tips and tricks you can follow to maximise the benefits of your FD card.
- Set up an auto-debit facility from your bank account to ensure timely payments of your credit card bill
- Regularly review the terms and conditions of your FD credit card
- Stay informed about interest rates, fees, and any changes to your credit limit or benefits
- If your FD credit card offers rewards or cashback, use them strategically to offset emergency expenses
A credit card on FD is a valuable financial tool, particularly in times of emergency. It’s an excellent option for handling unforeseen expenses because of its features, which include flexible credit limits, lower interest rates, and instant access to funds.
The One Credit Card is a standout option for a secured credit card. It helps you establish your credit history and offers a 5X reward program on purchases, making it a wise financial choice.
Through the One Credit Card app, you can demonstrate your creditworthiness in a secure and structured manner. This credit card online app has essential features, giving you the confidence to achieve financial independence. Use it to manage your transactions and swipe with confidence every time efficiently! Apply now and unlock a world of benefits at your fingertips.
