All You Need to Know About FD-Backed Credit Cards

“Credit cards don’t build debt—habits do.” 

But what if you could start with a credit card that’s safe, simple, and beginner-friendly? 

According to a recent RBI report, the number of credit cards in India doubled to around 10.80 crore by December 2024. Still, many people stay away from them—worried about rejection, hidden charges, or falling into debt. 

That’s where an FD-backed credit card makes sense. It’s backed by your own fixed deposit. It helps you build credit without risk. And yes—it’s made for beginners. 

In this blog, we’ll explore how an FD credit card works, why it’s a smart first step, and how it can give your CIBIL score a solid boost. 

What Is an FD-Backed Credit Card? 

An FD-backed credit card (or collateral credit card) is a card you get against a fixed deposit. Unlike regular cards that need income proof or a good credit score, this one uses your FD as security.  

You simply open a fixed deposit. The bank gives you a credit card with a limit based on your FD amount—usually 80% to 90% of it. 

So, instead of relying on your CIBIL or income, banks trust your deposit. It’s a great entry-level credit card that works just like any other card—swipe, pay bills, and shop online. 

The best part? It’s easy to get approved. 

Who Should Consider Getting One? 

If you’re just starting your financial journey, this card is your best friend. 

• Students who want to start building credit 

• First-time users with no previous credit history 

• Salaried professionals with irregular income proof 

• People with a low CIBIL score looking for a CIBIL boost 

This FD credit card is especially helpful for those who were rejected for unsecured cards. It’s a simple and beginner-friendly credit card that helps you build credit without financial pressure. 

How Does It Work with a Fixed Deposit?

Here’s how it works in real life: 

1. Open a fixed deposit with your bank. The minimum FD amount can be as low as ₹5,000–₹10,000 depending on the bank. 

2. Apply for a FD-backed card linked to that deposit. 

3. The bank gives you a credit limit based on your FD—usually 80% to 90%. 

4. You start using the card like any normal one. 

Your FD stays secure, but it also acts as a backup. If you don’t pay the bill, the bank can recover the money from your deposit. That’s why it’s also called a collateral credit card. 

Good news: If you use it wisely, your CIBIL score will rise in a few months. 

Key Benefits of FD-Backed Credit Cards 

Here’s why this FD credit card is worth considering: 

• No income proof required 

• Quick approval, even with low CIBIL 

• Ideal for credit beginners 

• Helps build strong credit history 

• Fixed deposit earns interest 

• Easier upgrade to regular cards later 

• Safer for first timers 

Many users treat this card like a credit builder tool. It’s a perfect balance of security and opportunity. 

Are There Any Risks or Limitations? 

While it’s great, it’s not perfect. Here are a few things to note: 

•  Your FD stays locked until you close the card or upgrade 

• Credit limit is lower than regular cards 

• If you miss payments, bank can break the FD to recover dues 

• Not ideal for large expenses due to the smaller limit 

Still, it’s safer than going into debt with an unsecured card. If used well, it’s a stepping stone to strong credit. 

How to Use Your Credit Limit Smartly 

This part is non-negotiable if you want to build credit fast. 

-> Use less than 30% of your credit limit. 
This shows banks that you’re responsible and not over-relying on credit. 

-> Always pay your dues in full. 
Minimum payments won’t help your CIBIL score. Clear everything. 

-> Avoid ATM cash withdrawals. 
They often attract high charges and don’t help your credit profile. 

-> Set reminders for due dates. 
Even one missed bill can hurt your credit journey. 

This card isn’t just about spending. It’s about smart financial habits. Use it right, and your CIBIL boost is just a few months away. 

Conclusion: Should You Get an FD Credit Card? 

If you want to build or repair your CIBIL score, don’t wait for the perfect moment. Start small. Start smart. An FD-backed credit card gives you that chance. It keeps your spending in check and helps you build a strong credit history—without risk. 

At WeCredit, we don’t just offer credit cards or personal loans—we help you move forward with confidence. Whether you’re starting fresh or picking yourself back up, we’re here to guide you toward better financial choices. 

Start your credit journey today—with WeCredit by your side.