The Money Show with Mr Raj Khosla | Should You Opt for Millennial Cards?

12 Nov 2019 // 21 min read // #mmm news
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Ms. Mubina Kapasi of ET Now converses Live with MyMoneyMantra Founder and MD Mr. Raj Khosla to review the newest range of Credit Cards on the block – Millennial Cards.

The whole world wants to target millennials and financial industry also wants to do that. And why not? Millennials have the maximum spending power, because of the age that they are in. Hence the card that is branded as the latest sell to the millennials is the millennial Credit Card. What exactly are they? Do they really bring about some very interesting features which millennials tend to use significantly? How do these cards differ from regular Credit Cards? How does one distinguish a marketing gimmick from a legitimate offer & discount? And how do you ensure that you do not get caught in a debt trap due to over usage of a Millennial Card? This is what we are going to discuss today with Mr Raj Khosla of MyMoneyMantra.

Thank you so much for joining us on The MoneyShow.

Excerpts:

1. Millennial Cards are all fad these days- right from a large bank like HDFC launching a range of Millennia Cards to a small fintech company like Slice that has come with a millennial card. These cards are marked by lots of discounts, cash backs etc. What’s your take on this Mr Khosla?

Mr. Raj Khosla:

India has the largest millennial population of 450 million. Currently there are only 28 millennial unique cardholders in India. There is an incredible runway ahead of us in terms of the marketplace. No wonder so many of our banks are targeting this segment.

HDFC Bank has launched a really nice range of cards targeted for millennials, the ones that young person would like to have. Millenial Cards are those which are designed to reward & benefit the “spends” that a young person is likely to have. Typically it may be on travel, fuel, online shopping. But, precisely the Millennial Cards are not different from any other Credit Card, except that this bunch of cards offers special rewards on travel, fuel ecommerce, retail shopping, etc. There is no other difference.

2. In many cases, like you mentioned, it’s simply just branding as Millennial Card. Let’s say I have to choose between two cards, Millennial Card & a Regular Card, what should be the key points I should compare the two cards on, particularly when millennial is not the clickbait for me.

Mr. Raj Khosla:

Millennial card could incidentally be Debit Card, Credit Card, Prepaid Card or EMI Card. It is not a narrow Credit Card offering. The difference between a Millennial Credit Card from that of any other Credit Card, is on the rewards & benefits that you get.

The rewards on Millennial Cards are designed for the age bracket somewhere in 20s. For instance, any of the Millennial Cards would not offer a Golf game as a benefit because that is not what a millennial is looking for. All the lifestyle habits like online shopping, fuel filling, buying movie tickets is where millennial card would be at variance.

SBI has launched online spending card, that offers accelerate rewards on online spends. This might not be branded as a card for millennials but it is what a Millennial Card is.

3. Lifestyle related deals, benefits are plenty. Are there any hidden costs involved?

Mr. Raj Khosla:

Well, there is actually no difference between these two sets of cards. If there would be any hidden cost involved; so will be in existence for the universe of all other cards! One thing that you must look for in a Millennial Card is expiry date. The difference in expiry date sometimes gets lost in fine print. Whereby you may think that you have accumulated points for something you liked a lot & but it turns out that the accumulated points actually expired in one year flat. In some cards, reward points last for 2-3 years and for some others you can carry forward rewards forever.

Secondly if there is any expense involved in redeeming these reward points or for that matter on any of the benefits on booking on hotel & so on, what are the likelihood of making a successful booking. Typically when you are making a booking or redeeming points, there is typically limited amount of merchandise on counter.  There is no different hidden cost involved.

4. With greater reward points, comes greater responsibility. How to ensure that I do not fall into a debt trap.

Mr. Raj Khosla:

That’s a truism. Whether it is a Millennial Card or any other Credit Card, you should not be basically spending because you are induced to acquire reward points.

The spending has to be need-based. Spending has to be based on a pattern that you are able to repay anything you are paying for now. You should not land yourself on a debt trap. That is something I will specifically caution millennials for sure. They are young and starting on their life. Financial discipline is essential. Make sure you purchase and spend only what you can repay.

Lastly the safety features, which one may leave behind- Never share your security details with your best friend or with whoever. It is yours and for you to use otherwise like they say: Savdhani Hati Aur Durgathna Gati. Pakki baat.

No Truer words. On that note, thank you so much Raj for valuable lessons and what not to do with Millennial Cards.