Want to get the low down on credit cards? Need guidance to read between the lines of terms and conditions laid down by the card issuing company? Wish to find out how best can you guard yourself against credit card fraud?
Noted personal finance expert Harsh Vardhan Roongta helps you with these and more credit card issues on Rediff Chat. Here's the chat transcript:
H V ROONGTA says, Welcome to this chat. I really enjoy these interactions and i hope you also find it useful. Looking forward to the interaction. let's get started.
shiva asked, we are getting some 75000 rs from sbi for credit cards wheather we can take that amount but we want to back within 60days
H V ROONGTA answers, I assume you mean that your cash limit on the card allows you to withdraw this amount. In normal circumstances it is not advisable to withdraw cash on your credit card as it incurs heavy fees (normally around 2 to 2.5% of the amount withdrwan) plus the interest on that amount also starts immediately - no free credit period on cash withdrwals. The interst rates are also quite stiff around 34% (after including the service tax). So all in all use some other means to borrow rather than borrowing on a credit card.
Suraj asked, Is it safe to do online transaction using credit cards in India?
H V ROONGTA answers, this is a often asked questions. You should use the same safeguards online that you will use while using the card in the offline (physical) world. The good rules to follows are : 1)Do not provide your credit crad number to an unknwon site 2)Look for the "verified by verisign" sign that indicates that the site has safeguards that have passed an independent body 3)in the url where you are giving your card look for the secure https sign - as in "https://www.xyz.com" rather than the usual "http://www.xyz.com". You should exercise similiar caution while using the card in the ofline world like not letting the card out of your sight while it is being swiped, etc.
Atriya asked, I want to have a MasterCard credit card, please suggest which bank is best to get a card from?
H V ROONGTA answers, Almost all leading banks offer a mastercard branded credit card. You can also approach loan market places like www.apnaloan.com for your requirement of a credit card.
sheikh asked, is there any problem if we always pay credit card bills in cash no matter wat the amount is ?
H V ROONGTA answers, Most banks do not accept the credit card payments in cash. I am sure you are aware that the banks are required to share information on credit cards (where the annual spend is more than Rs. 2 lacs) with the IT department. Even if some bank does accept the amount in cash you will still have a problem with the IT department to explain the source of your payment. All in all I would not advise you to pay in cash for your credit card outstanding.
hars asked, can we take action against a bank for unsolicited credit cards?
H V ROONGTA answers, Banks are not supposed to send unsolicited credit cards. If you do receive an unsolicited credit card you should cut it into 2 pieces and send it back to the bank for cancellation. You can also complain on the bank's website and if no response is received you can complain to the banking ombudsman appointed by RBI. details are on www.rbi.org.in
Ramesh asked, Sir-I want tobuy books from amazon.com thru my Internationalk credit card.I dont hold a passport.Can i do so ?
H V ROONGTA answers, Off course you can. You do not need a passport for purchasing anything online.
anjana asked, hi which is the best card these days citibank or any oyhrt thank u
H V ROONGTA answers, Most credit cards have similiar features in terms of upfront and recurring fees (normally waived for most consumers nowadays), interest rate for deferred payments, cash advance fee and interest rate, maximum interest free period, etc. The differntiating factors could be the reward point structure and zero or low interest balance transfer facilities. You can use the credit card comparator on www.apnaloan.com for comparing and applying for various credit cards.
vector asked, hi,the credit card company doen't send the bill on time and i am being asked to pa more money ... is there any authority for whom we can complain against the credit card company
H V ROONGTA answers, First file an official compalint on the bank's website and then if no response is recived (or no suitable response is received) in 15 working days you can complaint to the banking ombudsman appointed by RBI. Deatils on www.rbi.org.in
M asked, my credit card charged me for a transaction for which i had swiped my card but the transaction had come failed n i paid by another debit card? what should i do??
H V ROONGTA answers, The bank has a set procedure for raising a dispute. Use that process and the amount will be immeidately credited back to your account. The bank will then investigate the matter and if they mind merit in what you say the matter will rest there or else the bank may again re0debit the amount to your account. Normally most banks charge a fee for using this dispute resolution facility
tina asked, can please just tell me why banks are not giving credit cards to construction company employees
H V ROONGTA answers, Each bank has its own credit parameters for approving credit crad applications. The nromal factors that they consider are income, stability in terms of experience and residence, age, qualifications, etc. If a particular bank has declined your application it could be for a variety of reasons not necessarily becoz you work for a small construction company. The best bet is to try with a numbver of banks. You could also use www.apnaloan.com for approaching multiple banks for your credit card requirements.
jayesh asked, is it harmful to have around more credit cards
H V ROONGTA answers, You should use your credit card as a payment option and not as a source fo financing. In that case unless you are a heavy spender more than 2 cards (one Visa and one master) are probably superflous and not really required.
Manoj asked, Does it make sense to opt for a six-month EMI for the outstanding on your card? Or it's best to pay the whole amount in 2-3 months
H V ROONGTA answers, Good question. Normally the EMI options at around 18% are far cheaper than regular credit available on the credit card at around 34%. But most EMI options do not allow pre-payment and could also have upfront fees that may make them more expensive. If you require flexibility the regular credit card option may be suitable (though more expenbsive)else you can opt for the EMI option.
manas_nath asked, is there any bank which give added benefits on home loans if u are an existing credit card customer with a good repayment history
H V ROONGTA answers, Great Question CREDIT CARDS ARE AN EXCELLENT OPTION TO ESTABLISH YOUR CREDIT WORTHINESS. Normally most banks will sanction your loan much faster (and maybe at a slighly reduced rate) if you have a good repayment track record on your credit card.
AB asked, What exactly does pre approved card means? I had received calls from ICICI Bank and Citi telling me that my name has been chosen for such a card, and when I applied they sent me a regret letter!!
H V ROONGTA answers, I agree it is a disconcerting feature of the way that cards are marketed today. This happens primarily due to the follwoing reason: 1) Most banks cull out an pre-approved list of consumers based on some internal database (for example your savings acount history) or external database (for example your membership of a frequent flyer program). 2)In those programs while the banks do not require the consumer to provide income documents thay nevertheless still do physical checks at the ersidence and office of the consumer as well as check it against credit records of a external database - such as CIBIL or Satyam database of defaulters 3) These checks cost money to the bank andhence they are done only of you apply in response to the "pre-approved" offer 4) Sometimes the verification process shows up negative - mainly because nobody may be at home when they come for verification- opr the database may show (sometimes mistakenly) some default in the past in your name. This is the most likely reason for declining an application made in response to a "pre-approved" credit card.
erd asked, Hi, how profitable is the balance transfer option often put forth by the credit card companies?
H V ROONGTA answers, Balance transfer means that you pay off the balance outstanding on one credit card by getting a cheque made out by another credit card. Quite a few banks provide low (6-12%) interest and sometimes even nil interst rates to encourage you to use their credit cards to pay off the balance on a competitors credit card. The point to remember is that the consessional (or zero) interst rate is available only for a short duration 3-6 months after which the nromal interst rates apply. So whilst balance tarnsfer can be an excellent mean to iron out short term cash flow shortage it is clearly not a long term alternative.
erd asked, Hi, how profitable is the balance transfer option often put forth by the credit card companies?
H V ROONGTA answers, Balance transfer means that you pay off the balance outstanding on one credit card by getting a cheque made out by another credit card. Quite a few banks provide low (6-12%) interest and sometimes even nil interst rates to encourage you to use their credit cards to pay off the balance on a competitors credit card. The point to remember is that the consessional (or zero) interst rate is available only for a short duration 3-6 months after which the nromal interst rates apply. So whilst balance tarnsfer can be an excellent mean to iron out short term cash flow shortage it is clearly not a long term alternative.
fredrick asked, Can I get a credit card without owning PAN?
H V ROONGTA answers, Not any longer.
vishnu asked, Dear Sir, I has a SCB card in 2002 which was promised to me as Life Time Free card, but subsequently they have charged me for AMC and the dispute continued till 2004. The customer care has sent a mail confirmation regarding the closure of the card and reversal of the chagres. However they have listed my details as written off case and the same has been entered in CIBIL data. So when i am approaching other institures for card/personal loan they are rejecting basis the bad track of SCB, what should i do to remove my name from the CIBIL.
H V ROONGTA answers, What has happened to you is pretty unfortunate. I suggest that you file an offcial complaint with the bank on its website and if they do not corret this reporting within 2-3 weeks you should file a complaint with the banking ombudsman. You can also explore the possibility of filing a cas ein the consumer courts. Worldover this kind of thing is protected by legislation - Fair Credit reporting Act in the USA is an example- but these regulations await notification from RBI as far as India is concerned.
Shan asked, I hold a Credit Card and I understand that as per RBI guidelines I should get at least 10 days to see, verify and make the payment, however I just get the bills 2-3 days before due date. what action shall I take on this.
H V ROONGTA answers, I dont think there any RBI guidelines of the kind referred by you. This will be governed by the agreement you have with the concerned bank. the problem is probably occuring because of delay in receipt of the physical credit card statement. Most banks will send you an email bill if you register for the service. This may give you the review time that you seek.
Guru asked, I have purchase thru credit card around rs 10000 but i am not able to pay in time.so now i am getting the statements around 23000 i am wiling to pay the payements if there is any option to pay the actulas is the bank will accept or not i am waiting for your reply
H V ROONGTA answers, Claerly the bank is well within its right to charge you interest becoz you have not paid up the full amount on due date. I would advise you to strogly pay all legitimate dues of the bank as otherwise your default will be reported to the credit bureau which will severely restrict your ability to raise any laons (personla loan, eductaion loan, home loan) in the future.
apoorv_shah asked, How safe online transaction as swap is not at all requierd then suppose my card is stolen and some one spends all this money from online shopping then who is responsbile?
H V ROONGTA answers, Your liablity on the card ceases once you have officially apprised the bank of the loss of your credit card and obtained an official acknowledgenment for such report. Most banks have 24 hour call centre at which you can report this loss and they give you an unique registration number for acknowledging the recipt of such report.
SunilChoksi asked, Sir, Citibank take 4 to 5days time after depositing chaques in drop box and charge late payment. Can we demand acknowlegment from Banks at the time of depositing chaque.
H V ROONGTA answers, RBI has intsructed banks to provide acknowledgements where the cheques are depsted across the counter at the bank branch.
SunilChoksi asked, Sir, Citibank take 4 to 5days time after depositing chaques in drop box and charge late payment. Can we demand acknowlegment from Banks at the time of depositing chaque.
H V ROONGTA answers, You should complaint on the website of the concerned bank and if they do not give you a satisfactory response you should file a complaint with the banking ombudsman. deatials on www.rbi.org.in
Bhavin asked, Does a default in credit card repayment mean decrese in credtiworthiness as some DSA's say when calling up people who have defaulted in their payments, and is there a website indicating the credit ratings of that particular person?
H V ROONGTA answers, Yes it does. CIBIL is a common credit bureau which receives all repayment deatails(both ontime as well as deafults) from almost all leading banks. Most Mastercard and Visa have a defaulters dtabase to which all particpating banks contribute data of defaulting consumers. Any default data here is available to all lenders. henec any default clearly makes access to any form of credit in the future most difficult and definitely very expensive - if available at all.
ashwin asked, I am having 3 credit cards (SBI,ICICI,HDFC). I have clean payment track record( 2-3 Instances of recolving credit,But No Cheque bounce or Overlimit. But Now I am not getting any card. Is there any limit of card issuance to One Person.
H V ROONGTA answers, No there is no formal limit. But since the details of all these credit cards are available with CIBIL the new credit card issuers may probably be conclduing that you are already hevaily leveraged as compared to your income level and hence may be declinig your applicaton for another credit card.
sanky asked, I have used your site apnaloan.com however i am getting unsolicited calls from many banks, i went around for CC but am geting home loan after and also i got CC card offer from some dsa, is it safe to use ur site
H V ROONGTA answers, The privacy policy on our site is very clear. We only share your information with potential lenders for the product sought by you. We assist you in obtaining competitive quotes from multiple banks. WE DO NOT MAKE UNSOLIICITED CALLS. Over 300000 consumers have already benefitted from the Apnaloan experience.
badoni asked, Money small shopkeepers are charging around 1.5-2.5% of the purchse cost of the productdirect from the customers on ground that the credit card issuing bank charging that amount from them..whether this transaction is bonafide..if not what is the remedy..?
H V ROONGTA answers, Normally credit card payments may not be allowed for discounted merchandise (or may be allowed with teh surcharge of 1.50% mentioned by you). However this is rarely done in any large merchant establishment.
H V ROONGTA says, Thanks for the oevrwhelming response. My typing skills were tested to the limit. I apologise for not being able to answer all questions. You can refer to the transcript of the chat or logon to www.apnaloan.com for any further information. Do join me on my next chat. thanx and good evening
