IDFC First Bank Limited

I opened an account with the bank and also got a credit card from them. Here’s my view on their credit card strategy.
They say they design a product which they can sell to their near and dear one. And here they have made a product for which they can sell to their near and dear ones and they didn’t forgot to milk money from them.
First of all they say only flat 250 rs cash withdrawal charges and no interest, but they will give you 15000 rs cash withdrawal limit which turns out to be around 20% per annum. The zero interest will entice customers to withdraw cash but they cleverly priced it to make good amount of money for the bank.

And next thing is they say we don’t charge 48 percent per annum on your credit card revolving credit. My cibil is 805 and the rate i got is 18%. Like the low cash withdrawal fees it will also entice the customers to use idfc first credit card so that they can revlove it at a lower rate. But the catch here is they offering low rates to high cibil score customers who will pay back promptly anyway. By this they are attracting good payers to use their credit card for all of their purchases and even revolve it if they are short of funds. Bank earns MDR and intrest from the customer for revolving it. If they maintain strict onboarding process then it can make really really good amount of money for the bank while also keeping the most unsecured book very clean.
The management is employing well thought out plans to grow the credit card business. They are not at all being generous to customers but they are creating very good optics.