New earning professionals, please refer to: How to get a Credit Card with No Credit History in India?
Borrowers with no personal income can get a credit card by securing it against an fixed deposit. The can use the card to build a credit history and sooner or later such cards are upgraded based on timely repayments and usage.
The Fixed Deposit Method
Any individual above 18 years of age can apply for a credit card in India against a fixed deposit of at least ₹10,000. The credit card is issued with a limit of 90% of the fixed deposit amount. This is how I got my first credit card.
Some banks and card companies that offer you a credit card against fixed deposit are:
- ICICI Bank
- HDFC Bank
- Axis Bank
- Federal Bank
- SBI Card
- Scapia Card
There is also another method of getting a credit card for such people, known as the add-on card but their application process is difficult and rules vary across different card issuers.
Why Fixed Deposit-backed Credit Cards are better than Add-on Credit Cards?
Fixed deposit-backed credit cards are better than co-applicant cards (also known as add-on cards) because they are easier to get.
Further, add-on card rules very from banks to banks. HDFC Bank gave me an add-on card with my name on the card just being a namesake (the card was identical to my father’s card). However, ICICI Bank offers add-on cards under the family member’s name for whom the credit card is required.
Frequently Asked Questions
1. Why do banks do not give credit card to people with no income?
Credit Cards are unsecured debt and hence a bank has everything to lose if a borrower does not repay their credit card bills. Also, it becomes almost impossible for banks to recovery the lent principle, let alone the interest.
For details on how Credit works in India, refer to: How Does the Indian Credit System Work?
