For individuals new to credit or those looking to rebuild their credit history, the Magnet Credit Card offered by SBM Bank (India) presents a unique and potentially beneficial option. Let’s explore the key features and functionalities of this card to understand who it might best suit.
Secured Credit with FD Backing
Unlike traditional credit cards, which assess your creditworthiness before assigning a limit, the Magnet Card operates as a secured credit card. This means you must first create a fixed deposit (FD) with SBM Bank. The credit limit on the card is then set at 90% of your FD amount. This approach offers two key advantages:
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Credit Building: By using the card responsibly and making timely payments, you build a positive credit history, which is crucial for accessing other financial products like loans and mortgages in the future.
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Controlled Spending: The direct link to your FD acts as a safeguard against overspending. Unlike traditional credit cards, you cannot spend beyond the limit set by your FD amount, promoting responsible financial habits.
Features and Benefits
Beyond the unique secured credit approach, the Magnet Card offers several other noteworthy features:
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International Acceptance: The card is available on Mastercard, Rupay, or Visa networks, allowing for international usage.
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Rewards Program: While details are limited, the Magnet app mentions “unlimited rewards,” suggesting a potential rewards program for cardholders.
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Mobile App Management: The dedicated Magnet app provides convenient features like managing your account, tracking expenses, and making payments.
Considerations and Eligibility
While the Magnet Card offers a valuable entry point for credit beginners, it’s essential to consider some limitations:
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Limited Credit Limit: The maximum credit limit is capped at 90% of your FD amount, which might be restrictive for individuals seeking larger spending power.
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FD Requirement: The need to create an FD ties up your capital for the duration of your card usage.
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Eligibility: Currently, the Magnet Card seems primarily targeted towards residents of India.
Overall, the Magnet Credit Card caters to individuals who want to build their credit history responsibly and are comfortable with the secured credit approach and FD requirement. It offers a controlled spending environment while providing the benefits of a traditional credit card with added convenience through its mobile app. However, potential users should carefully consider the limitations before applying.
