As you may have read in my previous post on credit cards, I do own a few cards. I use them for specific purposes, the AMEX card to gain the rewards, ICICI-Amazon card to get cashback on Amazon, ICICI-HPCL card for some fuel related cashbacks, HSBC Platinum card since it is lifetime free and has occasional offers on it.
Of these cards, only the Amazon card offers me an option for No cost EMI for 3/6/9 months, on selected products, only on Amazon. What if, there was a card, which would provide us with a similar no cost EMI option for all spends? I feel it would be brilliant.
A few days ago, I watched a video on Youtube describing the Uni 1/3rd card. The USP of this card is that it lets you choose to split your bill on each spend, whether you want to pay it in full or convert it into a no cost EMI for 3 months. This appealed to me greatly. For the relatively big ticket spends, they can now be converted into more affordable packets for a period of 3 months, and that too is not restricted by a website or platform as such. Off course, most of the other cards offer the option to convert a big spend into EMIs but there is always an interest rate attached to it, which is not the case here for the three months period. Also, if you choose to pay the bill in full, there is a 1% cashback. 1% may not sound a lot, but it is worth the amount in actual rupees, which is in turn almost 4 to 5 times more in worth than each reward points earned. Also, the card is Visa powered, hence, no issues with acceptance. So, convinced that this is a good idea, I applied for the card.
The application process is simple enough. You download the app and sign up for a new card. A quick KYC based on your PAN card, Aadhar Card and a selfie later, you have the card assigned to you with a fair credit limit. It took about 24 hours for me to have the card available online for transactions and in a week, the card arrived home.
The box was nice and the card is minimalistic. In the box, there was the card, a mask, a bag tag and a small packet of Toblerone chocolate. Overall, a simple yet thoughtful gesture towards initiating a new customer into the fold.
As of now, I am looking forward to using this card mainly for the transactions which generally do not yield much points or cashbacks, so that the advantage of the card’s 1% cashback can be utilized.
Also, the card and its app are in beta stage, simply put, it is still a very new card, so a lot more facilities and uses of the card is expected soon. If you apply for the card now, you’ll be one of the early adopters of the card, and that is rewarded by Uni by not charging the joining or annual fee. This may change in the future though.
Finally, in my opinion, this card provides a good proposition towards owning and using a credit card. Off course, like all cards, always ensure that you are able to pay your dues in full. What makes this interesting is that if you pay in full, which you are expected to anyway, you get 1% cashback, so, that is an incentive to pay in full. And if you are just not able to accommodate the full payment or feel a little stressed about the big purchase that you have done, split the bill into 3 parts and pay with relative ease. I would recommend this card to people who have a financial discipline in place and know how to handle their finances. It is easy to overspend when you are paying just a fraction of the cost immediately. So, good luck with using this promising card and I am hoping that more facilities are made available soon.
Feel free to put up thoughts and questions as comments to the post.
I was born in 1991 and neither of my parents, during their years of career has had a credit card. So, at the first opportunity, 26 years later, I promptly obtained one. For a lot of people in the middle class, my generation is the first one which takes the plunge into the world of rewards, cashbacks, due dates and balance transfers. Almost every bank we know of, issues a credit card and each has its own pros and cons.
Amongst the cards available to be issued based on applications, AMEX cards are one of the most desirable ones. So, yet again, upon realizing that I was eligible for one and would be able to use it fruitfully, I applied and obtained one. The prime objective was to experience the enigma around AMEX cards, the rewards programmes and to be honest, the slight feeling of pride from the second glance the card receives as you hand it out to be used.
In the post ahead, I shall discuss some of the basic questions that I had asked around and hope that it’ll help you too. The discussion aims to cover
Types of cards – Debit/Credit/Charge
How AMEX is different?
Eligibility and why you should get one
The rewards programme
Pros and Cons as experienced by me
How to get an AMEX card with no annual fee
Types of Cards – Debit/Credit/Charge
These three are the major types of cards available easily to any customer.
The Debit card is linked directly to your bank account. There are daily transaction limits on the card and you can, technically, spend as much as your balance is in the linked account. In India, for most debit cards, a daily transaction limit of ₹50,000 exists. Debit cards are given out as a part of the standard kit while you open a new account in the banks. These are generally free of charge or a minimum yearly charge for account maintenance is charged.
The Credit Card (CC) is not linked directly to your bank account, in a manner that what you spend on the credit card will not dent your bank balance immediately. Every CC comes with a limit of sorts, which is the maximum expense that you can incur on that card. There is a fixed number of days in which you must repay the CC account, which varies from 30 to 51 days in general, which is known as a credit cycle. The limit of the card is dependent on your income, spending habits, CIBIL scores; simply put how reliable you are that you shall pay the money back, from the bank’s point of view. This causes the limit to vary wildly. For me, I have had cards where the limit varied from ₹18,000 to ₹2,50,000, and the limits keep on changing over time. Also, in case you are unable to pay your dues on the due date, there is an interest that is charged for every day that you delay settling the due. These cards can have loads of rewards attached to spending goals and may have annual charges for them.
What about the needs of high spend groups? Having a limit on their spending is not suitable for them, so there comes the third kind, Charge Cards. These cards are meant mostly for people who require virtually unlimited spending power while being able to repay on a fixed date. Charge cards mostly include an uncapped spending limit, loads of reward points and an annual fee. The prime point for a charge card is that you must pay the due on the day of the statement. There is no free credit period as such for these cards. So, these cards are best suited for business purposes, where transactions are settled on a fixed date basis. In case there is a fee default, it gets reported to the credit bureaus and has major negative effects on the cardholder’s credit ratings and in turn to his/her credibility in the eyes of the bank. So, if you are sorted with your finances, have the requisite control needed and do not mind paying the annual fees, the rewards of a charge card can be very alluring indeed.
How is AMEX different?
The biggest difference is that AMerican EXpress (AMEX) is not a bank. It is a credit card issuing agency that issues its own cards and has tie-ups with most major banks of the world. So, you can not have debit cards from AMEX, though you might have AMEX affiliated ones, similar to the VISA or MasterCard or RuPay ones that we see commonly. There are prepaid AMEX cards too. So, what difference does it make for you and me? The answer is, to obtain an AMEX card, you’ll have to either apply for it or be invited to its membership. Of course, most major banks of the country have credit cards that are AMEX affiliated, but they are still not technically AMEX cards.
Eligibility and Should You get one
The eligibility criteria for AMEX cards vary according to the cards themselves but are quite stringent as compared to the cards from other banks. An annual salary over ₹5,00,000 with a CIBIL score of 750+is generally recommended for being eligible for at least one card. We must remember always that being eligible does not mean that you must apply for it. You must have a clear idea of why you want the card? Is it for the benefits and rewards or just use it as a status symbol? Are you ready to pay the annual fee for it (You can get it for free too you know! Check the last point 😉)? Would you be able to utilize the card fruitfully? If you can justify yourself on these questions, then you should go ahead with it for sure.
My reasons to get the AMEX card were driven by the zest to try out the rewards being offered by AMEX. Since I had already been using my existing cards for most of my expenses and shifting to the new AMEX card was neither difficult nor have I had to go out of my way to spend differently.
The Rewards Programme
Let’s be honest, we choose credit cards based on the rewards they provide. Most have some sort of a cashback in place; be it as points, statement credits or miles. These rewards can be redeemed for physical things such as discount coupons, electronics, holidays, flight tickets and even cars. And this is what entices us ultimately, the value for return.
For AMEX cards, this value is high. They have multiple reward programmes running at a time which can be used quite interestingly often. As of now, besides the discounts being offered on the card in dining, shopping and such, they have spend based rewards at 18k and 24k points. Of course, you can redeem your points for statement credit monthly, but that is a sheer wastage of points.
Let’s take a quick example to see how using the AMEX card cleverly can be useful for us.
The card is AMEX MRCC (Amex Membership Rewards Card)
The monthly expense is at least ₹20,000. This is not difficult if you include rent payment via credit card.
You have signed up for the spend based rewards programmes.
For the MRCC, you get 1 point for every ₹50 spent (some exclusions exist, such as utilities, fuel, etc.).
Spending ₹2,40,000 in a year provides you with 4800 points only. That is honestly very sad.
But, if you make at least 4 transactions of ₹1500+, you get another 1000 points. Assuming that is being done, the new total becomes 16800 points.
Signing up for a spend based reward programme, where if you spend more than ₹20,000 in a calendar month, you get another 1000 additional points. Assuming that is being done too, now, the final total becomes, 28800 points.
Now, with 28.8k points, you become eligible for both 18k and 24k rewards.
The 18k rewards has Taj vouchers, Amazon gift certificates, statement credits etc, while the 24k rewards has Tanishq vouchers too along with Taj vouchers and Amazon gift certificates. You can choose from these at your will. Apart from redeeming the points as rewards on AMEX, you can choose to convert some of them to air miles and redeem flight tickets too.
So, you see, if used cleverly, AMEX credit cards can be quite useful. It is not that these offers are available only for AMEX, but rather every card comes with its own sets of rewards. Some research helps.
Pros and Cons As I see it
The Pros and Cons of an AMEX card are as varied as the person using it. For me, the rewards were more enticing than standard cashback, while the main disappointment has been the non-inclusion of the MRCC in the airport lounge programme. I do not fret much about it though, since I have other cards which provide airport lounge access, but if the MRCC provided the same, it would have been nicer. Not having to pay annual charges offsets the disappointments greatly.
How to get an AMEX card for free
One thing we must understand is that the reason AMEX and other better-than-the-rest cards can offer the rewards is that they all have annual fees. In the case of AMEX, the MRCC and the SmartEarn are the two cards that have the option of fees waiver based on the spend.
SmartEarn is aimed towards the ones who want to have an AMEX card in their wallet mostly to feel premium about owning an AMEX card. It has the least entry requirements and does not have a lot of value in terms of rewards other than accelerated points accumulation.
This card has an annual fee of ₹495 + taxes which is waived off upon spending more than ₹40,000 in the previous billing year.
The MRCC on the other hand is aimed at people who want to enjoy the fruits of their expenditures but are not willing to spend a lot though. It misses out on lounge access, golf club memberships etc, but offers you possibilities to stay at Taj or gift yourself/ your beloved Tanishq items.
This card has a first-year fee of ₹1000 + taxes and an annual fee of ₹4500 + taxes. But, if you use a referral code, such as the one below, the first year fee becomes Nil and the annual fees come down to ₹1500 + taxes. In fact, if you use the card the way I have mentioned in the example and use my referral code, that’s how you can get your AMEX card for free. Do hurry though, this offer is valid till May 2021 as of now.
To end, I shall say that it is time that we begin using credit cards for our daily expenses. It promotes healthy financial discipline and improves your credit score. The credit score is an important tool to decide at what rate you shall get your loan from a bank. Mostly, higher credit score holders get better terms for their loans and the chances of rejection are minimized greatly.
Feel free to reach out to me with your doubts and questions, I shall be happy to help solve them 😊