How are playing cards issued by fintech companies totally different from common bank cards?

While it’s possible you’ll be a getting a barrage of telephone calls from financial institution representatives for purchasing a brand new bank card, there’s a new child on the block i.e., playing cards issued by fintech firms.

Unlike the same old bank cards, they aren’t issued by industrial banks. Some of those playing cards embrace Uni card and Slice card. Although some NBFCs additionally concern their bank cards however they often be a part of palms with a financial institution, as an example, Bajaj Finserve points its tremendous card along with RBL Bank.

As a matter of truth, most of those digital playing cards will not be typical bank cards. What they do is to supply a credit score line. They give a digital card to make use of that credit score line. After a number of days, one will get a bodily card as properly at an tackle talked about within the kind.

Although these playing cards may be utilized by anybody and not using a credit score rating nevertheless it doesn’t imply that anybody with a poor CIBIL rating can even procure a fintech card simply.

Card options

Before explaining the options of those playing cards, let’s revisit the idea behind an everyday bank card. One can use a bank card to make a purchase order or to pay a invoice following which the cardboard holder will get 45 days to make the fee.

On the opposite hand, Uni card allows you to pay one-third fee which suggests you may pay one-third of what you spent whereas the remaining may be spent in two equal instalments with out having to pay a payment for late fee.

Slice card additionally affords this selection nevertheless it provides you an possibility for six, 9 and 12 months as properly. The invoice fee possibility is given just for three days to Slice clients and one cannot make invoice fee even earlier than the due date. In case of the Uni card, one could make the fee inside 10 days.

At the identical time, Bajaj Finserv RBL Super Card permits cardholders to transform purchases of ₹2,500 and above into simple EMIs, as per the BajajFinserv web site. But not like different fintech bank cards, that is extra inclined in direction of a financial institution bank card which requires an applicant to have a 750 plus credit score rating, should be in an everyday employment.

Far from the group

Coming again to Uni and Slice: they aren’t typical bank cards, so you may’t add them to apps akin to Cred, a bank card invoice fee platform that allows members to clear their bank card payments on time.

And you may’t use them to hold out worldwide transactions or for making money withdrawal, in response to Bekifaayati, a monetary companies firm.

To be capable of procure one in all these playing cards, you solely have to obtain the app and simply observe the steps. In a while, it is possible for you to to get the digital card. The digital card is distributed instantly whereas bodily is acquired solely after a number of days.

These playing cards, simply as different bank cards, supply cashbacks. Uni card affords one p.c cashback, and slice wherever between 1-2 p.c. Slice even affords further low cost on among the companies together with uber, Zomato and Amazon, provides Bekifaayati.

Exercise warning

However, card customers should concentrate on the truth that these playing cards do not give you typical options of a bank card akin to money withdrawal and worldwide funds.

“You don’t get money withdrawal, worldwide funds, and reward factors, loyalty factors, which is a serious disadvantage of those playing cards,” says Suleman Elahi, a person on Quora.

He provides, “Whatever you spend on-line/offline utilizing Slice/Uni playing cards seems as a shopper sturdy mortgage aka unsecured private mortgage in your credit score historical past. And only one missed fee will harm the CIBIL in a really dangerous manner, which is mostly not the case with the bank cards.”

Another use Ravi Ranjan says, “These are BNPL playing cards. So, you will notice a mortgage account entry in your CIBIL report. The entry is not going to be from Slice/Uni however from the financing accomplice that they’ve tied up with.”

So, it is vital for any potential person to train due warning and perform an intensive analysis earlier than making use of for one in all these fintech playing cards which supply credit score line to clients and not using a credit score rating historical past.

For extra such tales, go online to MintGenie. 

Subscribe to Mint Newsletters

* Enter a legitimate electronic mail

* Thank you for subscribing to our e-newsletter.