You may have seen these cards ads on Facebook or YouTube that this card help you pay your 1 bill splitting into 3 parts without any interest or fee. What is going behind which you don’t see in your application? So, today in this blog, I’ll share the Disadvantages of 1/3rd Cards.
Steps to apply for the 1/3rd Card
When you apply for this card, you go through 3 simple steps that help the system gather information and fetch the correct amount of your credit limit.
- In the first step, they request to share your information, which helps register your information into the system.
- The second step required some documents like AADHAR & PAN card required to fetch your credit score from CRIF.
- In the third step, according to your credit score, they provide your credit limit (which can be increased according to your expands).
With these steps, you can avail yourself of a 1/3rd card. According to these companies, CEOs think that this method aims to intuitively solve the problem of short-term liquidity without burdening consumers with high-interest fees.
Disadvantages of 1/3rd Cards
Let’s see the truth behind these cards. These cards are credit line cards that are similar to credit cards, but some points are different. When you apply for a 1/3rd card, A Non-Banking Financial Company (NBFC) tie-up with the card company, they assign a durable consumer loan (Unsecured Personal Loan) against the credit limit you get. In credit cards, it didn’t show any loan. So, it’s good to have a credit card against a credit line card.
For example, Ajay is a professional, and he works at the company XYZ. He requested to avail of this card, and with these steps, he gets a credit limit of 30,000. Ajay was not aware of CIBIL Score, and after some months, he applied for a loan in the bank. Bank rejected the application because he already had a loan. He checked his CIBIL Score, and he saw there which 1/3rd card he’s using it’s assigned as a loan and because of this bank rejected his application.
In this example, Ajay’s application was rejected due to an existing loan. When you have the money, then you don’t need to take a loan. Some companies are adding multiple loans in the CIBIL that come from the multiple NBFCs & Which is terrible and the biggest disadvantage of these cards.
This Consumer durable loan count as liabilities and according to the factors that affect your CIBIL Score. In this way, this card harm your CIBIL Score.
If you’re a student and banks are not giving you a credit card. Because of your salary or other factors, you can go with this card. But if you can choose between these two, then go with a credit card over a credit line card.
Many influencers and YouTubers promote this card because of promotion or reward money, but now you know the truth behind 1/3rd Cards.