Fi has recently launched a co-branded credit card in partnership with Federal Bank. Marketed as “Finally, a Credit Card made for you!” and “Get used to being rewarded!” this product has generated great interest.
However, is it really as rewarding and personalized as it claims to be? Let’s discuss its features, rewards, benefits, and drawbacks.
Let’s start.
Joining and Annual Fees
The Fi Credit Card certainly has some interesting features, but let’s delve deeper into its cost structure, including the joining fee and associated welcome benefits:
- Eligibility: The card requires you to have a Fi savings bank account, which could be a hurdle for those already committed to other banking institutions.
- Joining Fee: The card has a joining fee of INR 2000 plus taxes. To offset this, it offers welcome vouchers worth INR 5000 or 50,000 Fi coins (with an approximate value of INR 1500). However, once you deduct the value of these benefits from the joining fee, you still end up paying about INR 500 plus GST. This is a point of contention as, typically, welcome benefits should at least cover the joining fee.
- Annual Fee: From the second year onwards, the card charges an annual fee of INR 2000+GST (approximately INR 2360 per year). But, if your annual spending exceeds INR 250,000, this fee is waived.
Given these factors, the Fi Credit Card could be worth its fees if you use it extensively, particularly if your spending crosses the threshold for the annual fee waiver.
Nonetheless, the mandatory requirement of having a Fi savings bank account and the less-than-ideal welcome benefits may make potential cardholders think twice before applying.
Fi and Federal Bank might need to reconsider their welcome benefits to make this card more appealing to prospective customers.
How Do the Rewards and Benefits of the Fi Credit Card Stack Up?
The Fi Credit Card offers a variety of rewards and benefits.
Using a table, let’s break down the rewards and benefits of the Fi Credit Card.
Feature
Details
Reward Points
– Base reward rate: 0.6% (1 Fi coin for every INR 5 spent) – Shopping from Fi Collection: 1.2% reward rate – Spend over INR 15k on top three Fi Collection brands: 3% reward rate
Inclusions and Exclusions
– Rent and fuel spend earn Fi coins at base reward rate (not counted towards milestone benefits) – Wallet loads and gold purchases do not earn rewards or count towards milestones
Milestone Benefits
– Annual spend of INR 2.5 lakh: vouchers worth INR 2.5k – Annual spend of INR 4 lakh: additional vouchers worth INR 8k (total INR 10.5k in vouchers)
Lounge Access
– One lounge access per quarter provided you spend INR 10k in that quarter
Now, let’s illustrate with an example:
Suppose you spend INR 20,000 a month on your Fi Credit Card, with INR 10,000 spent on brands from the Fi Collection. Your annual spending would be INR 240,000.
- Your base reward points (0.6%) on INR 10,000 regular spending would be 2,000 Fi coins per month, or 24,000 Fi coins in a year.
- Your 2x rewards (1.2%) on INR 10,000 spent on Fi Collection brands would be 4,000 coins per month, or 48,000 coins in a year.
- This totals 72,000 Fi coins a year, which is equivalent to INR 2,160 (since 1 Fi coin = 3 paise).
- In addition, since your annual spending exceeds INR 2.5 lakh, you’d receive vouchers worth INR 2,500 as milestone benefits.
Therefore, the total value of your rewards and benefits would be INR 2,160 (Fi coins) + INR 2,500 (milestone benefits) = INR 4,660 or an effective return of approximately 1.94% on your annual spending.
Why Should You Consider the Fi Credit Card?
The Fi Credit Card comes with a unique set of features that could make it an appealing choice for certain users. Here are some reasons why you might want to consider it:
1. Reward Points on Rent and Fuel Spends
Unlike many other cards, the Fi Credit Card offers reward points on rent and fuel spending at a rate of 0.6%.
Although this might seem meager, it’s better than not receiving any points at all. For instance, if you spend INR 10,000 monthly on rent and fuel, you’d earn 2,000 Fi coins per month, or 24,000 Fi coins per year.
That’s a value of INR 720 (as 1 Fi coin = 3 paise) that you wouldn’t get with many other cards.
2. Double Rewards on Fi Collection:
The card offers a 1.2% reward rate when you shop from the 21 brands in the Fi Collection.
These brands cover a wide range of categories, including online shopping, groceries, travel, food, and more.
So, if you regularly shop from these brands, your rewards could quickly add up.
For example, spending INR 5,000 a month on these brands would earn you 2,000 Fi coins a month, or 24,000 Fi coins a year, translating to INR 720 in value.
3. 5x Rewards on Top Brands
If your overall monthly bill is over INR 15,000, you earn a 3% reward rate on the top three brands you spend the most on from the Fi Collection.
This could be particularly beneficial if you have high recurring expenses with certain brands.
For instance, if you spend INR 7,500 monthly on your top three brands, you’d earn 7,500 Fi coins or 90,000 Fi coins per year, equating to INR 2,700 in value.
4. Low Forex Surcharge
The Fi Credit Card only charges a 1% forex surcharge, significantly lower than the industry standard of 3.5%.
This could result in substantial savings if you frequently make overseas transactions.
For example, if you spend INR 10,000 monthly on international transactions, you’d save INR 2,500 a year compared to a card with a 3.5% forex charge.
While these features make the Fi Credit Card potentially appealing, it’s important to remember that its value will ultimately depend on your individual spending habits and financial needs.
Why Should You Think Twice Before Opting for the Fi Credit Card?
While the Fi Credit Card offers several unique benefits, it also has drawbacks. Here’s why you might want to reconsider:
1. Unclear Value of Fi Coins
The value of Fi coins isn’t explicitly mentioned, which can make it hard to understand just how much you’re earning in rewards.
For example, if you earn 1,000 Fi coins and there’s no clear conversion value, you might not know whether that equates to INR 10, INR 100, or INR 1,000.
2. High Annual Fee
The Fi Credit Card has an annual fee of INR 2,000 plus taxes. When compared to other cards with similar features, this is quite steep.
For instance, many cashback cards have lower fees or offer waivers based on yearly spending.
3. No Add-on Cards or Cash Withdrawals
Unlike many credit cards, Fi does not offer the option of add-on cards for family members or allow cash withdrawals. This restricts the card’s flexibility and usability.
4. Mandatory Fi Savings Account
To get a Fi Credit Card, you must first open a Fi savings account. This extra step, which isn’t common with most credit cards, could be seen as an inconvenience.
5. Complex Rewards Structure
The Fi Credit Card’s reward structure can be confusing.
For example, you earn 1 Fi coin for every INR 5 spent, but then there are 2x rewards for spending on the Fi Collection brands and 5x rewards on the top three brands from the Fi Collection if your total monthly spend exceeds INR 15,000.
Keeping track of these varying reward rates could be complicated.
6. Slow KYC Process
Despite being a fintech company, Fi’s KYC process can take up to three days longer than some traditional banks. This could be a drawback if you’re looking for a quick account setup.
While the Fi Credit Card has some appealing features, these drawbacks could make it less attractive compared to other options in the market.
It’s crucial to weigh these factors against your individual needs and spending habits before deciding to apply for this card.
Is the Fi Credit Card Really as Rewarding as It Claims to Be?
MyCreditCardClub Rating: 4/5
While offering a potential reward rate of up to 5.6%, the Fi Credit Card realistically provides an estimated reward rate between 1.5% to 2%.
The impressive 5.6% reward rate is largely based on spending-based milestone vouchers, which may not be achievable for all cardholders.
Here are some key points to consider:
- Compulsory Fi Savings Account: To qualify for the Fi Credit Card, opening a Fi savings account is mandatory. This could be a deterrent for those who prefer not to switch or add banking services.
- High Annual Fee: The Fi Credit Card carries a high annual fee of INR 2,000 without any renewal benefits, which might not offer enough value for some users.
- Marketing Claims: Fi’s marketing slogans, such as “Get used to being rewarded!” and “Finally, a Credit Card made for you!” might not match every user’s experience or expectations.
Whether the Fi Credit Card is right for you depends on your spending habits and financial goals. It’s always crucial to do your research and carefully consider your options when choosing a credit card.
