•FD-backed credit cards are presented as a safe entry point for building credit history, especially for those without a strong profile.
•Your fixed deposit acts as collateral, with the credit limit typically 75-90% of the FD amount; default allows the bank to use your FD.
•These cards help build credit history through regular usage and timely repayments, making it easier to access better financial products later.
•Despite the 'safe' perception, interest rates on outstanding balances are as high as regular credit cards (often over 30% annually), significantly outweighing FD earnings (6-7%).
•Your money is locked in the FD, reducing liquidity, and some FD-backed cards offer limited features despite annual fees, requiring careful evaluation.
