IDFC First Bank ready to tap credit card biz
IDFC First Bank, the private sector lender has adopted highly aggressive strategy to expand its credit card business. It has decided to offer interest-free cash on credit cards, a move which will help its fledgling business operations to establish its presence in highly saturated market.
Banks typically charge Rs 250-450 for every cash withdrawal on credit cards, along with an interest of 2.5-3.5% per month, applicable from the day of withdrawal till the full amount is repaid
IDFC First Bank seeks to expand its credit card business with two unique offerings, including interest-free cash advances for 48 days and dynamic interest rates on revolving credit. The services were launched on Friday.
The interest-free cash scheme is a first for the industry and is a feature that the bank is testing. The lender is entering the credit card space with its existing customers on an invitation only basis, but will extend the facility to other customers after March.
The lender always tried to charge customers both a fee and interest on the cash component to prevent people from taking it or to make money out of it.
IDFC First Bank wants to make just the right amount of money, about Rs 250 per transaction, irrespective of the amount a customer withdraws.
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