It is safe to say that hhaving a credit card can make financial management more convenient and easy. With the option to apply for a credit card online, it has become easier than ever to gain access to credit. However, when you are looking to apply for a credit card online, you might come across two distinct types: regular credit cards and Fixed Deposit (FD) credit cards.
Understanding the differences between these can help you make an informed decision. Let’s dive into the key differences between a regular credit card and FD credit card.
1. Eligibility Criteria
- Regular Credit Card: Typically requires a good credit score, proof of income, and employment stability. If you have a strong credit history, you can easily get approval when you apply for a credit card online. In some cases, you can also apply for a credit card without income proof and fd such as student’s credit card.
- FD Credit Card: Ideal for those with no credit history or a low credit score. The eligibility for an FD credit card is based on the fixed deposit you maintain with the bank.
2. Credit Limit
- Regular Credit Card: The credit limit is determined based on your credit score, income, and repayment history. Higher scores and incomes usually mean higher credit limits.
- FD Credit Card: The credit limit is directly linked to the amount of the fixed deposit. Generally, banks offer a credit limit ranging from 80% to 90% of the FD value.
3. Risk Assessment
- Regular Credit Card: Banks assess the risk based on your creditworthiness. They rely on credit scores to determine your risk profile.
- FD Credit Card: The risk is minimal for banks as the fixed deposit acts as collateral. This makes it a safer option for both the bank and the cardholder.
4. Interest Rates
- Regular Credit Card: Typically, interest rates are higher if you carry a balance beyond the due date. Rates can vary based on your credit score.
- FD Credit Card: Often come with lower interest rates compared to regular credit cards since the bank holds your fixed deposit as security.
5. Rewards and Benefits
- Regular Credit Card: Often come with various rewards like cashback, travel miles, and discount offers. The benefits can be extensive, especially for premium cards.
- FD Credit Card: Generally offer fewer rewards and benefits compared to regular credit cards. However, they can still provide basic rewards and cashback.
6. Application Process
- Regular Credit Card: You can apply for a credit card online or offline. The approval process involves thorough verification of your credit history and financial stability.
- FD Credit Card: The application process is simpler and quicker, especially if you already have a fixed deposit with the bank. The approval is almost guaranteed as long as the FD is valid.
7. Credit Score Impact
- Regular Credit Card: Usage impacts your credit score significantly. Timely payments can improve your score, while defaults can have a negative impact.
- FD Credit Card: Provides a way to build or improve your credit score with minimal risk. Since the card is secured against your FD, the chances of default are lower, benefiting your credit score.
8. Security Deposit
- Regular Credit Card: No security deposit is required. The card is issued purely on the basis of your creditworthiness.
- FD Credit Card: Requires a fixed deposit as collateral. The amount of the FD determines your credit limit and acts as security for the bank.
9. Target Audience
- Regular Credit Card: Suited for individuals with a stable income and a good credit history. Best for those who can manage their finances well and seek extensive benefits.
- FD Credit Card: Ideal for students, first-time cardholders, or those with poor credit scores. It’s a stepping stone towards building a good credit history.
10. Fees and Charges
- Regular Credit Card: May come with annual fees, late payment charges, and other miscellaneous fees depending on the card type.
- FD Credit Card: Fees and charges are usually lower. Some banks might waive the annual fee if you maintain the FD.
Benefits of Investing in Airtel Axis Bank Credit Card
If you’re considering applying for a credit card online, the Airtel Axis Bank Credit Card is a standout option. Here are some of its remarkable benefits:
- Large Credit Limit: Offers a substantial credit limit of up to ₹9,00,000, making it a powerful tool for managing large expenses.
- Cashback Offers: Enjoy cashback up to ₹16,000, which can significantly reduce your overall expenses.
- 100% Digital Process: The application and management of the card are entirely digital, providing convenience and efficiency.
- Amazing Discounts and Offers: Get exclusive discounts and offers on various purchases, enhancing your savings on everyday spending.
Choosing between a regular credit card and an FD credit card depends on your financial situation and credit history. While regular credit cards offer extensive benefits and higher credit limits, FD credit cards are perfect for those starting their credit journey or looking to rebuild their credit score. When you decide to apply for a credit card online, considering these factors will help you make the best choice. Additionally, the Airtel Axis Bank Credit Card stands out with its lucrative benefits, making it an excellent option for those eligible.
