How Pay 1/3 Card Is Different From Credit Cards? Should You Invest

In the last couple of years, Fintech and banking developed themselves like never before. It is nothing but a great combination of technology and banking. As a result of this update, a new segment of cards emerged, named Pay1/3 Card. But what are Pay 1/3 means? Is it a Credit card? In this article, we have covered the basics of the card functioning.

Pay 1/3 Card

No, it is not a Credit Card even though it appears to function similarly to a conventional credit card, the Pay 1/3rd card is officially not a credit card. It's essentially a PayLater or Pay 1/3rd card, which means you may spend Rs 15,000 this month and pay Rs 5,000 each month for the following three months without incurring any interest or fees. Technically, it's a Lifetime Free card (at least for the time being), and it comes with a reasonable late charge slab scheme (instead of daily interest).

 How it is different from Credit Cards?

Having said that, Pay 1/3 card is not a Credit card, even though it works similar to Credit Card. if your credit card payments aren't paid on time, Your credit card company charges you a late payment fee as well as an outrageous interest rate. A new pay later card is now available that allows you to divide your monthly bill into three equal pieces and pay them over the following three months at no additional cost. 

The Cashback it offers makes it a great alternative to a traditional Credit Card. How does it work? The card by default divides "each payment" into three parts, but you can choose to pay in full and when you pay the full payment you receive a 1 or 2% (depending on the card company) flat cashback. The cashback method is quite easy; you simply choose the transaction you wish to pay in full with a few touches, and the cashback is automatically adjusted to the unbilled statement.

Although the card allows you to divide your monthly payments into three interest-free and cost-free installments, if your spending continues unchecked, you may find yourself in debt. The penalties for failing to fulfill your payment deadlines are severe. The card does not charge interest on the billing amount if paid within the 1/3rd payment window, but it does charge a late fee if any of the three payments are missed. Furthermore, you may also use the respective card app to keep track of your spending trends in real-time. 

Is it good to invest?

The card is a good investment for new-to-credit (NTC) consumers who may not be qualified for typical credit cards owing to low wages or irregular income, or who do not want to dig into heavy paperwork. However, before making any decision sure you don't go over your credit limit or prolong your payback time beyond the free credit period. Not following your credit limit could trap you in the interest load.