thank you for your informative article. this is indeed helpful to the people who fall prey to card representative who generally get a rosy picture before getting somebody to sign for the card. ashutosh meher
Thank you for the message. really it is a very good caution. If you study the credit card guidlines, you will be surpise to see that all services the bank will charge on us. i studied the charges of the bank on CC and i was surpised to see that any mistake from the customer side will end up in charging high rate of interest or charges.
Its a holder's responsibility to read and get familiar with product (credit card) before utilising the same and if it suits him/her then only utilise it. IF you are doing not paying your dues on time that means its your mistake and you have to pay for it, i mean this is a true for every aspect of life not just in case of credit card. In this world who will give you the free credit. I am with the credit card company atlease they are offering free cards withoght charging annual fees. its a very good facility.
The banks entce the prospective customers with a lot of offers. Besides the above, some of them cheat us in the form of bonus points earned. For example one X card bank says that for every 100 Rupees spent one rewarding point is being allotted. But in fact it is not so. For an amount of Rs15 K they have credited only 95 points instead of the assured 150 and for an amount of Rs 43 K spent only 290 points! No reply for the representation. They points can be accumulated and can be exchanged to some gift, which are again worth half of its price. The interest Rate is 2.95% workingout to 35%, as good as a Kabuliwala! The best way to get rid of the menace is to keep the creditcards away if possible or at an arm's distance if at all unavoidable. However it depends upon individuals.
To be fair with the writer this article is of some use. (don't say waste of time. it is unfair!)
it tried to explain as many things as possible.
yes it is true that hidden charges like insurance and various shields(!) are levied.
but the new idea of 0% Balance transfer is useful for people who are in control of themselves and need to postpone their payments by say 3-6 months. One of my friend has rotated bills to the tune of 80k (reg purchase of land) first by payment through card and then rotating it for last 9 months!(80k interest free loan for 9 months). secondly one can take leverage of cashback offers if we read all the fine print and a littlebit wise
but the problem is if you make a little mistake they are ready to cash it on and charge you enormous amounts.
It seems from Mr.Raja Krishnan's view that he is a benificiary of the credit card mess. otherwise when an article which is pointing out the unpleasant hard facts about credit card he is unnecessarily irritated. I am sure that 90% of the people who use credit card aren't aware of these. It may be argued that when someone has accepted something he/she should abide by rules regulation therein. But what is the harm in discussing all these blood sucking formula of the banks. It is just like giving legal cover to the dreaded criminal Abu Saleem because Govt of India has given word to the portugal govt that he will not be given capital punishment. What Mr Raja Krishnan say?
This is a stupid article. All the disadvantages as specified by the author can be avoided by sticking to the due dates of payment, planning purchases so as to get maximum free credit days for instance immediately after the statement generation day which is a fixed date for all credit card companies, by not utilsing cash advances from ATM's. If so much is the desparation for cash that one has to bank uopn the credit card money, then better pay heavy interest. Remember there is no collateral security involved and the corresponding risk has to be covered.Similarly by the same logic if one doesnt have full amount to pay on the due date then obviously one is overspending and must pay for that.
Many times there are several complaints about credit card issuers. I feel that those who are based in Mumbai, may try sending a complaint copy to "Mumbai Grahak Panchayat, Sant Dnyaneshwar Marg, JVPD Scheme, Mumbai 400056. e-mail id: 'mgpanchayat@hotmail'
It would be worthwhile to remember one main principle: NEVER, I repeat NEVER, in your life, buy anything on credit card for which you are not able to make full payment on presentation of bill. (If ALL the card holders follow this principle, ALL the card companies will have to wind up operations!). Most of you are e-literate and have access to microsoft excel. Just try feeding the values in financial functions of excel to ascertain the usurious rate of interest that you are paying by 'revolving' the credit. (Generally at least 30% p.a.) The card issuers make most money by enticing the customers to 'revolve' credit i.e 'borrow' money at unthinkable rates of interest! All interest rates have come down in the last few years except the rates on revolving credit pushed on to you. Its time RBI put some limits of the rates of 'lending' under the sweet name of 'revolving credit'. Any views??
Please note that HDFC Silver Master Card charges 2.75% on the total amount and not on the outstanding amount.
For Eg. Say the monthly statement shows an amount of Rs. 10000 and before the last date you have made a payment for Rs. 9000.00. Now the bank will charge 2.75% on Rs. 10000 and not on Rs. 1000(balance outstanding amount.)
