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Product Review: IDBI Magic Card for Salary Accounts



IDBI Bank, which had earlier waived all charges for its account holders, has now launched a debit-cum-credit card named 'Magic Card', which can be obtained only by its salary account holders.

Essentially a debit card, it functions as an overdraft facility, allowing the user to spend more than the balance in his/ her account up to a predetermined credit limit.

FEATURES

According to the bank, the credit limit is a multiple of an individual's salary which can go up to three times in accordance with the eligibility. For instance, if the account holder draws a salary of . 50,000, he can get an overdraft credit limit of . 50,000. So if the credit limit is . 50,000, the account holder can spend the bank balance plus . 50,000 credit amount. The daily withdrawal limit has been fixed at. 50,000. The salary received by you will be used by the bank to adjust the credit availed. Like credit cards, you can earn reward points for using the card to make purchases. It also comes with an in-built insurance cover for lost, stolen or counterfeit card, which will come to your aid in case your card is misused by fraudsters.

CHARGES

The bank levies a charge of 14.75% per annum for PSU staffers and 15.75% for privatesector employees on the credit amount used by the card holder, while the processing fee is nil. Interest is calculated on the overdraft amount on a daily basis, but charged on a monthly basis. The card does not entail a cash advance charge that other credit cards impose for cash withdrawal at ATMs. Also, it has done away with third-party ATM fee for using the card at other banks' ATM more than five transactions a month. While the interest rate levied is lower than what credit cards carry – up to 39-44% per annum – it is applicable from the day you use the credit limit unlike credit cards which offer a 30-45 day interest-free period. This USP of credit cards has made them popular and in this area, credit cards score over Magic Card. In this context, it is comparable to a personal loan rather than a credit card.

UPSIDE

Apart from the convenience the card offers, lower charges, when compared to other credit cards, constitute a key advantage. Waiver of cash withdrawal charges is also a plus point.

DOWNSIDE

While all credit cards offer an interest-free period of 30-45 days during which the amount used can be repaid, this card charges interest for the entire period of credit use.
 

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