FinTech lender Rupee has launched a card that offers credit based on the value of customers’ mortgaged gold holdings such as jewelery and jewelery. Rupik Fintech Lender has joined hands with RBL Bank to offer Gold Baked Cards. Customers can use this card just like any other card besides just pledging their gold. Rupik Prime works just like a credit card except it has no application fee or annual renewal fee but if the loan is not cleared on time then interest has to be paid against the bills. The card can be availed under the selection scheme which also includes 37 days and 45 days interest free credit offer. 2 1/2% interest per month i.e. 30% interest per annum is charged on arrears or principal after interest free credit term. It only works on a credit card basis. The card is offered in Hyderabad, Mumbai, Pune, Chennai, Kolkata, Jaipur, Rajkot, Vadodara, Chandigarh, Ahmedabad, Surat and Bengaluru and other cities. Online applications can be made for virtual and physical cards.
Holders need to know how a gold baked card differs from a gold loan or credit card. Fintech lender Rupee has launched a card that offers credit based on customer’s mortgaged gold holdings such as jewelery and jewelery. This is an asset baked card called Rupik Prime. RBL offers Rupee Gold Card in partnership with the bank. Fintech lenders cannot issue a card, so a connection with a bank is required. The card uses the network at home. Customers can get the card by pledging their gold jewelery. Rupee offers a credit limit of up to 75% of the value of the pledged gold. The maximum credit limit is Rs 50 lakh. Individuals such as salaried employees and retirees (who have gold) have chosen this card for use in emergencies. Small merchants have applied for this card.
Cardholders can also withdraw rupee (up to 100% of the approved credit limit). The money is transferred to their bank account. 1% processing fee is charged. Ordinary credit cards charge higher processing fees for cash withdrawals because they are unsecured. The card appeals to people who have difficulty getting a normal credit card. Using this card, you can easily create a credit record by making timely payments and prepare for getting an unsecured credit card or home loan or auto loan in the future.
This card is much easier to subscribe to and receive as it is backed up like a pledged jewelry shield. Ordinary credit cards are subject to strict screening procedures to at least reasonably convince potential customers that the bill will be paid on time. All stores on the Rupik network will accept Rupik Prime over the counter. It can also be used for online shopping. One reward point is earned for every Rs 200 spent.
Rupik stores gold pledged in treasuries, including cash management, solutions and security vehicles. It bears storage costs. Rupee allows customers to temporarily withdraw their mortgaged jewelry or gold for purposes such as attending a wedding, although the credit limit on a gold card is adjusted accordingly. A strong grievance and support mechanism has been provided for the consumers to exercise their rights and get their grievances resolved with the Insurer Bank. Customers can always use RBI’s Integrated Lokpal Scheme for any increase.
Now the other side also needs to be checked. Unlike other credit cards, 30% interest is charged annually on unpaid bills. However, this rate is significantly higher than the gold loan rate of 7 – 12%. This is a disadvantage because the interest rate on gold powered cards (annual percentage rate) is almost as close to unsecured credit cards. If the annual percentage rate is higher, it will play a limited role in attracting customers to this card.
Getting credit for a short term (free period of 35 – 45 days) is reasonable, but for a long term it is expensive. Non-payment of arrears also affects a person’s credit score. The irony is that in case of default, Rupik can auction the mortgaged gold as a last resort! A person who is eligible for an unsecured (normal) credit card should not block capital (gold) and should not take a loan to obtain a secured credit card. This card offers more convenience than long term credit or long term aspirations.
Don’t buy long-term assets on the card, which will put financial matters in trouble. For large purchases where one has to pay for several months, if one must borrow as a last resort, it would be easier to get a gold loan by mortgaging gold directly with a bank or non-banking finance or with a rupee or use the best, common credit card. If necessary, convert large purchases into EMIs and then pay your bills on time. Consumers should also make sure that after how many days Rupik can sell the mortgaged gold in the worst case scenario? Rupik Prime credit cards offer a distinct feature but punctuality is a must in business. This card has that priority!
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