To garner a bigger share of the country’s lucrative payroll card market, India’s IDBI Bank Ltd. has begun offering a debit card that provides a line of credit when cardholders overdraw their account, the issuer announced Aug. 8.
The Magic Card payroll card is available in Visa- and MasterCard-branded variants, a customer-service representative from the bank tells PaymentsSource.
“After the savings balance is exhausted, cardholders will still be able to make withdrawals or purchases on the credit facility,” she says. “Interest on these transactions will be levied from the date of the transaction, and there will be no credit-free period.”
However, the interest rate will be less than that applied to credit cards, the representative adds, declining to provide specific rate information. The interest rate will depend on the credit rating of the company the bank signs up to provide the payroll card service.
The credit, or overdraft, limit will be approximately three times the employee’s net salary, according to the representative. The card comes with no annual fee and a 50,000 rupee (US$1,111 or 783 euros) limit on combined daily purchases and cash withdrawals.
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