2 Ways to Get Credit Card for Defaulter: Against FD & Add-On Card

Uncertainties such as job loss, medical emergency etc. can many times result in financial problems. And this is very common these days. So even individuals having good credit history can miss or delay in making credit card payment. And if this behavior is regular, it can result in your account getting closed and marking you as a defaulter. And in addition to this, the account data is sent to credit bureaus. And any future application for credit card or loan will most likely be rejected due to your default status.

So even if you make default due to being jobless or with intent, banks will still mark you a defaulter or non-performing asset (NPA).

So how can you still get credit card even after defaulting?

There are two ways to get credit card for defaulters or individuals who are NPAs as follows:

Credit card against fixed deposit:

Also called as secured credit card, it is a very convenient option requiring no income proof. Your income statements is the very first document asked by any card issuing bank. It helps them evaluate the credit worthiness of the applicant. However in order to get credit card against fixed deposit, you need to hold fixed FD account with the bank with minimum deposit and tenure.

There are many banks offering credit card against FD such as:

  1. ICICI Bank – Instant Credit Card
  2. Axis Bank – Insta Credit Card
  3. Kotak Mahindra Bank – Aqua Gold Card
  4. Central Bank of India – Aspire Credit Card
  5. State Bank of India – Check out their recently launched Unnati credit card.

The credit limit offered is typically 80%-85% of the amount kept in FD. However you should make monthly payments on time. Otherwise banks have complete right to deduct the money from the FD account along with higher interest, as per the terms and conditions.

Add-on Card:

Another solution for defaulters to get credit card is by applying for a add-on card. Also called as supplementary card. Such cards are offered to family members of the primary card holders. Although such cards are only offered to primary card holders with a good credit history, the supplementary card owner should never miss or delay in making payment, keep credit utilization as low as possible, never over cross the limit. This is because any bad behavior will straight away impact the credit rating of the primary card holder.

What if both the above mentioned solutions do not work. How can defaulter can still get a credit card?

  1. For this he/she will have to make all the due payment and clear the account balance.
  2. Post this, negotiate with the bank and explain the reason for the default. If your past repayment history was good, there is a higher chance of approval.

Impact of Credit Card Default:

Irrespective of the reason for default, banks deal with them very stringently. There are no emotions in any business.

Your card account is closed and marked as non-performing asset (NPA).

Your account details are reported to credit bureaus. And the details are accessed by member banks whenever you apply for any credit in the future. Since you have been a defaulter in the past, any future credit application is most likely to get rejected. There are more problems involved. Account closure doesn’t mean you’re free.

Post closure, banks handover your case to collection agency. And defaulter will start getting frequent calls from collection agency. If phone option does not solve their problem, you will start seeing them in your home asking for money. This means more harassment.

So as you can see default on credit card can bring nightmare. And this is reason it is always recommended to make proper use of credit card and make balance amount payment in full, on-time. And also keep a tab on the card limit.

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