Mumbai: A credit card allowing cash withdrawal – and interest free – sounds too good to be true. But IDFC First Bank is offering one, claiming another industry-first perquisite by way of the lowest finance charges that would be synchronised with customer ratings. The lender is set to levy finance charges at an annual rate of 9% for the best-rated customer, climbing up to 36% for lower-rated customers.
Generally, the annual percentage rate or the APR for other banks ranges from 34-40%. Customers can also use interest-free cash withdrawal facilities at ATMs of up to 48 days. They will have to pay a nominal fee of ₹250 per transaction against ₹500 charged and interest charges levied by other major lenders.
“We are hoping to shake-up the industry with these disruptive first-of-its-kind initiatives; we hope with this we will be a reasonably strong and one of the most preferred cards as we go along,” B Madhivanan, chief operating officer, IDFC First Bank, told ET.
The lender did a closed user group pilot with 15,000 of its employees before the launch. Currently, the credit card membership is only open to existing IDFC First Bank customers and will be thrown open to others from April 2021
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