While you may be a getting a barrage of phone calls from bank representatives for buying a new credit card, there is a new kid on the block i.e., cards issued by fintech companies.
Unlike the usual credit cards, they are not issued by commercial banks. Some of these cards include Uni card and Slice card. Although some NBFCs also issue their credit cards but they usually join hands with a bank, for instance, Bajaj Finserve issues its super card in conjunction with RBL Bank.
As a matter of fact, most of these virtual cards are not typical credit cards. What they do is to offer a credit line. They give a virtual card to use that credit line. After a few days, one gets a physical card as well at an address mentioned in the form.
Although these cards can be applied by anyone without a credit score but it doesn’t mean that anyone with a poor CIBIL score can also procure a fintech card easily.
Before explaining the features of these cards, let’s revisit the concept behind a regular credit card. One can use a credit card to make a purchase or to pay a bill following which the card holder gets 45 days to make the payment.
On the other hand, Uni card enables you to pay in three parts over three months, which means you can pay one-third of what you spent while the remaining can be paid in two equal instalments without having to pay a fee for late payment.
Slice card also offers this option but it gives you an option for six, nine and 12 months as well. The bill payment option is given only for three days to Slice customers and one can't make bill payment even before the due date. In case of the Uni card, one can make the payment within 10 days.
At the same time, Bajaj Finserv RBL Super Card enables cardholders to convert purchases of ₹2,500 and above into easy EMIs, as per the BajajFinserv website. But unlike other fintech credit cards, this is more inclined towards a bank credit card which requires an applicant to have a 750 plus credit score, must be in a regular employment.
Differences between credit card & fintech cards
|Criteria||Credit cards||Fintech cards|
|Amount||Can spend up to a threshold||Get a credit line just like BNPL|
|International payment||Allowed||Not allowed|
|Cash withdrawal||Allowed up to a limit||Not allowed|
|Genesis||Issued by bank||Linked to a mobile app|
Far from the crowd
Coming back to Uni and Slice: they are not typical credit cards, so you can’t add them to apps such as Cred, a credit card bill payment platform that enables members to clear their credit card bills on time.
And you can’t use them to carry out international transactions or for making cash withdrawal, according to Bekifaayati, a financial services company.
To be able to procure one of these cards, you only need to download the app and just follow the steps. In some time, you will be able to get the virtual card. The virtual card is sent immediately whereas physical is received only after a few days.
These cards, just as other credit cards, offer cashbacks. Uni card offers one percent cashback, and slice anywhere between 1-2 percent. Slice even offers additional discount on some of the services including uber, Zomato and Amazon, adds Bekifaayati.
However, card users must be aware of the fact that these cards don't offer you typical features of a credit card such as cash withdrawal and international payments.
“You don’t get cash withdrawal, international payments, and reward points, loyalty points, which is a major drawback of these cards,” says Suleman Elahi, a user on Quora.
Whatever you spend online/offline using Slice/Uni cards appears as a consumer loan in your credit history. And missed payments will impact your CIBIL score similar to the credit cards.
Another use Ravi Ranjan says, “These are BNPL cards. So, you will see a loan account entry in your CIBIL report. The entry will not be from Slice/Uni but from the financing partner that they have tied up with.”
So, it is important for any potential user to exercise due caution and carry out a thorough research before applying for one of these fintech cards which offer credit line to customers without a credit score history.