IDFC WOW Credit Card Review

IDFC First Bank has entered the secured credit cards space with IDFC WOW credit card. At present on the bank’s website says “Express Interest”. That means the bank has not started issuing the credit card yet but is only inviting interest as of now.However, the card should be launched in July or August. How good is the IDFC WOW credit card? Should you apply for it? Read to find out.

IDFC WOW  Credit Card

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Fees and Eligibility

• 0 joining and annual fee. I.e. it’s an LTF card.

Rewards and Benefits:

• No joining and recurring benefits as such.
• Reward Points:
  • 4 reward points for every 100 spent (i.e. 1% reward rate).
  • 0% markup on forex spends.
  • No reward points for fuel and insurance spends.
  • IDFC bank will charge INR99+taxes as reward redemption fees from 1^st October.

What features make IDFC WOW credit card stand out?

Credit limit of upto 200% and a min. of 100%

IDFC WOW offers a credit limit of 100% of the FD marked as a lien with the bank. In fact, the T&Cs here (clause 36.5) state that the credit limit can even go up to 200% of the FD. That is in the best-case scenario if you make an FD of 10,000 your credit limit can be 20,000.

This is something that I have seen for the first time. Until now, OneCard Lite was offering the highest credit limit at 110% and a few banks use to offer up to 90%. This is definitely a feature that makes this credit card stand out.

It needs a FD of only 5K

IDFC WOW credit card only need an FD of 5000 to get the card. Again, this is something I have come across for the first time. Usually, banks will prefer FD of a minimum of 10000 for any secured credit card. This could be because banks typically offer a credit limit of 80% against FDs for a secured credit card. Thus, any FD under 10K and thus resultant credit limit of 8K would not make sense for both the holder and the issuer. However, I am sure that the IDFC bank personnel will ask you to make an FD of a minimum of 10K , instead of 5k, under the garb of a higher credit limit.

Reward rate of 1%

While 1% reward rate on credit cards is nothing to write about. However, given that it’s offered on a secured credit card is commendable. The reason being no other secured credit card offers a flat 1% reward rate. Kotak 811 does offer a 1%+ reward rate, buts that is only after incorporating rewards on milestone spends.

0% forex markup

0% forex markup is something unique to this card. Only a few credit cards offer 0% forex markup and none of them is offered as LTF for sure. So definitely, this is unique to this card. But, let’s be honest; someone who takes a secured card won’t be doing a lot of foreign spends for sure. So this feature might look good on paper, but unlikely that it will be used widely by the users.

Highest FD rate at 6.25%, at the moment

For secured credit cards, one important thing that needs to be checked is the FD rate being offered. IDFC WOW credit card scores on this front too. At the moment, IDFC First Bank is offering the highest FD rates at 6.25% in the 1year bucket.

Where IDFC WOW credit card doesn’t score

 No reward points on fuel and insurance transactions

IDFC WOW credit card does not offer reward points on fuel, insurance, EMI and cash withdrawal transactions. Though many credit cards don’t offer points on fuel, EMI and cash withdrawal transactions. However, not offering reward points for insurance transactions is not done. Check out the best fuel credit cards in case you are interested.

No milestone benefits

This credit card doesn’t offer any milestone benefit. The bank could have offered some milestone spend levels at a monthly spend of say 20k, the way it’s done for other cards from IDFC bank. Otherwise, they could have set an annual spending target of say 150k for another 1% reward rate, at the least. I think the addition of a milestone benefit on top of a 1% base reward rate can make this a compelling proposition.

Reward redemption fees

IDFC First Bank will start charging a reward redemption fee of 99+GST starting 1^st October 2022. As per my understanding, this will be applicable on IDFC WOW credit cards too. The reason is, the reward redemption fee is mentioned in the credit card MITC document and WOW credit card is not excluded from it. Thus effectively the reward rate on this credit card will not be 1% but somewhat lower than that.

Comparison with other secured credit cards

Below is a dynamic calculator to compare the reward rate of the IDFC WOW credit card with other secured credit cards. IDFC card definitely scores in terms of reward rate in most scenarios. However, there will be a few use cases (user-dependent) where its reward rate will be lower than others.

Conclusion

IDFC WOW credit card seems to be a good product with a decent 1% reward rate. As I have mentioned in my previous article that first-time users who are not able to get a regular credit card should prefer a secured credit card such as OneCard Lite, Kotak 811 or even the IDFC WOW, over credit-line cards. Because a secured credit card is a real credit card after all and not a product that imitates a credit card.

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