Thursday, May 7, 2009

Credit Card Nuisances and Non-acceptance

I got my first Credit card 3 months after I started working. It was a Gold card. I was very happy with it, flaunted it to my friends. Was proud about it. Alas! as everyone else, I learnt it the hard way.

I have 2 issues which I think is not unique to me alone.


I always believe that its all in your hands to handle stuff. One cant really blame anyone else but you. I have had more than 1 credit card; its never been a problem for me to use them prudentially. I am a spendthrift, yet I have always paid my bills on time. You know; the bills - i.e. exact amount that you swiped for; which is negligible but other exorbitant fee like interest, service charge, hidden charges and all other blah..blah...blah...

One particular Indian bank really does this well. Today morning, I get an alert on my cell phone

"Dear Customer, effective 06 May 2009, the cash limit on your XXXXX Bank Credit Card xxxx007 will be Rs 0 and the total credit limit will be Rs.. XXXXX/-"

I did not care as I cut the card into 4 pieces and threw it away long time ago. The account was still active though. This particular bank has been doing dubious stuffs; and I have always taken it. They would charge extra amount and quote it as defaulter fine and so on.

One more instance2 years ago - I received 2 credit cards from the bank at different intervals. It was attached with a Congratulatory message - "As you are our privileged customer....blah..blah..blah....we are offering you an extra card....."

I called them to enquire why they sent the card as it was nothing special. As such, the account and the credit limit is still the same. This was something like an Add-on card. Whats the hoopla about it? I asked them why didn't they intimate me before sending and why didn't they have the courtesy to ask me if I would require it?

Phat comes the reply from the customer service executive - "We called you ma'am. You approved it and hence we sent it".
I asked when was the call date and to which number I was contacted.

He mentioned "21st August 2006, Ph number 91xxxxxxxxxx". (My cell phone)

The truth was that I was not in India at the mentioned date and I had got my phone service suspended during my absence in India.

I thought enough of this and never really used those 2 cards. Recently I got a mail from the credit card department that as my card was inactive, they are going to suspend it. What big deal! Go do it!

Yeah, so after all these nasty experiences, I decided to confront them today after I received this message. The executive told me that they review the payment history regularly and it is bank's policy. They have decided to nullify my cash limit but my credit limit remains the same. He also added that this would get affected only if I used the card to withdraw cash.

Even though I did not use the card anymore, I wanted to know the solid motive behind it. I persisted and said "I might want to withdraw cash during emergency. And moreover, I have been holding the card for almost 4 years now. Was there any payment delay from my side? Whats exactly the reason? You guys did not even intimate before deciding on this. Do you only review credit and payment history to strip off privileges? You have never increased my credit limit while other banks have done it"

Having said this, I asked them to cancel my account and the card. Anyways, I learnt the hard way of having these cards and their nuisances. They charge huge interest and all other nonsensical changes.

The executive has sent my case for review and to see if my cash limit will be revoked - in spite of me being adamant to cancel the card.


Due to the recent market downturn, lay-offs and in these times of credit crunch, everyone prefers hard cash. If you are someone who prefer plastic when it comes to spending; it might leave you fuming when you figure out that the restaurants, lounge bars, malls, don't accept credit cards anymore; flashing your card would rather leave you embarrassed.

Otherwise also, there are these so called technical glitches, power failures, phone lines down and so on. Aren't they supposed to intimate as soon the patrons walk in rather than put them in an awkward position later?

Talking about one such experience, when it was time to pay the bill at a coffee shop, the waiter came back with my card and said "Its barred madam". It was so embarrassing. He said it loud enough for everyone to hear. I immediately called the card's customer care and they assured me that the card was fine from my end. It ought to be that the swiping machine was probably malfunctioning

I had to pay through cash later.

Maybe, these new rules and updates are due to recession!! They want to save themselves from paying tax as much as possible as card transactions mean that the money is routed through bank, making if accountable for tax.

PS : My ethical sense has restricted me from quoting the bank's name but I am very disappointed with them.


  1. Very useful information. Thanks. The card issuing companies (usually the banks) hate those people who pay the entire billed amount on time...because these customers use their money and pay no interest. They just want you to pay the minimum balance only and keep paying interest for ever. Also, it is not a good idea to withdraw cash from a 'credit' card.

  2. Continuation:

    If your billing date is first of the month and you buy something on the last date of previous month, you have about 22 days (due date) to pay the bill. If you pay the entire amount there is not interest. In other words, you have a maximum of 22 days of free credit. But cash withdrawal does not work that day. First, there is a withdrawal charge and second, the interest starts from day one (and no free credit days).

  3. Sorry, typo. I should have typed cash withdrawal does not work that way.

  4. Right Mano...I have no such plans to withdraw cash as I need to pay 'handling' charges and later interest. I did not keep mum as I wanted a solid reason for all the actions these people take according to their whims and fancies.

  5. Very good blog. Nice advise from Professor Mano. Would like to take a Personal Finance 101 lesson from Professor Mano. How can I reach him?

  6. Thanks Vivek. There's more to these...The 'balance transfer', 'reward points', 'EMI'....these are all hogwash.

    If you want to reach Mano, I'll just check with him if its fine to publish his email id here. He would surely love to hear from you, that I am sure. Else just mail me and I will respond back with his id. :-)


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