Secure plastic

Credit cards linked to fixed deposits are good for customers and even better for banks

When 30-year-old Nidhi Singh, a human resource recruiter with a leading telecom company in Mumbai, wanted a credit card to supplement her emergency travel funds for a trip abroad, she was surprised and dismayed to find that none of the banks would give her one — she had a low CIBIL (Credit Information Bureau) score, the rating of her creditworthiness based on her financial history. The culprits were a late payment on a personal loan and a one-time settlement on an earlier credit card. So it was that banks viewed Singh as a risky customer even though she had a secure job and steady earnings. Customers like Singh can now get ‘secured cards’ linked to their fixed deposits from leading banks like State Bank of India (SBI), which launched them in tier 2 and tier 3 cities in September, ICICI Bank and DCB (rolled out a couple of months ago). Axis Bank and HDFC Bank, too, offer FD-linked cards.