Many Banks Offer Cheaper Purchase Options


BANGALORE: Many Indian banks are offering cards with a credit limit of 80-90 per cent of the fixed deposit. Banks like ICICI, Axis, Kotak and ABN Amro have started giving the latest format for credit cards with a credit limit of around 80-90 per cent of the deposited amount. While one earns interest on the fixed deposit, the charges on these cards are similar to those on regular cards. Thus many cheaper options are available now, reports Business Standard.

These fixed deposit-linked credit cards, also allow people to borrow up to 85 per cent. For instance, the SBI Cash Advantage card provides the same facility, charging 2.25 per cent a month; Axis Bank's Insta Easy Credit card charges 1.95 per cent a month.

Since the fixed deposit will earn interest at nine per cent for 390 days, the effective rate of interest on EMIs is five per cent annually which is around 13-8 per cent. The best part is that you will even continue to earn interest on the fixed deposit. Also, as interest is on reducing balance, the net outgo will be less every month, said Suresh Sadagopan, founder Ladder7 Financial Advisors.