This is the season for Hidden Charges on your Credit Card

Over the last few months Indian Credit Card Issuers are going through a tough time on the inability of the customers to pay back the money that they have spent on the Credit Card. The whole model of the Credit Card industry has been turned up-side down. This has happened due to the following reasons.

(1) Tremendous Sales pressure within the banks has forced them to give Credit Cards to sub- prime Customers, customers who do not have a proven ability to pay
(2) Some banks have even given Credit Cards to customers who do not know what a Credit Card is, and hence do not know they need to pay back (sounds funny isn’t it!)
(3) About 3 years back, the banks on an average would lose Rs.3 for every Rs.100 lent out as bad debt, not that number is Rs.15 for every Rs.100 lent out
(4) This is a 12% reduction in the profit margin, which was anyways between 3% to 4%, and now the companies are heavily in loss

As a result banks are issuing fewer credit cards and to make the business more profitable have increased the fees and charges, hoping to make more fee revenue. Therefore it is very important to pay attention to the revised fees and charges communication that you would receive from the banks. It would also do you good to check the revised fees and charges communication on your Bank website.

Just a few pointers to what has happened in the market over the last year

(1) Barclays has raised the Late Payment Fee from Rs.300 to Rs.500 to Rs.600 to I think Rs.1000 for some tier of customers (I agree they have been very transparent which was their launch tagline ….. and I have received 4 badly printed inland letters communicating the changes)
(2) HSBC has done away with the fuel surcharge of 2.5% which was waived for the customer and if you want a fuel surcharge waiver they have introduced a fee of Rs.349 or so which will make sense only if you have fuel purchase in excess of Rs.12000 per year
(3) HSBC has introduced a transaction charge on making Credit Card Payments through HSBC Branches and Drop Boxes (how funny is this …….. the customer is actually paying back, when many customers are not paying back)
(4) Deutsche Bank has reduced the value of a Reward Point from Re.1 to 75 Paise
(5) ICICI Bank has started charging for Credit Card Payments through NEFT

So dear customers, the point I am trying to make is that BEWARE ……. All Credit Card issuers are trying to get more fee revenue and will try to extract those fees from you. Some do it openly and some do it slyly. So please check your Credit Card Statements carefully and if you see any hidden charges, please login a complaint with the bank and if they do not reverse it, with the Banking Ombudsman. Anyways do let me know … I would like to know the ways in which Credit Card issuers are trying to make their money.

You can write to me on Ask.Pranav@Gmail.Com and I will revert back to you as soon as possble.

Regards.

Pranav.

Case Study (HSBC Bank) - Payment for HSBC Credit Card which was never received!

Customer Says:

Hi, I applied for HSBC credit card one year before and after some weeks I got call and letter from bank that they are not issuing any credit card and in case i got any credit card, dispatch it. No credit card and document i received.

After 6 month i got a call from HSBC recovery dept. to pay my due of 5000 otherwise they list my name in defaulter and blah blah. After that i called customer care who says my account is closed. After that i start ignoring them,but they continuously calling me .

Then they started bargaining with me to settle down.At the end i offered them, to pay 1000 rupees .Then they told me that their man will come at my place next day and pay him cash.As i heard from net that after that also they don't stop. Then i asked him to give me the letter of settlement i will pay that amount in the bank.And :D they refused. so the game continues...I would like to hear if there is any solution to get rid of it without paying any due to recovery dept and HSBC.

Ask Pranav Says

Yes, there is a way out. I am assuming that whatever you have stated is the truth.
If you have not even received a Credit Card from HSCB, there is no reason why you need to do any settlement with them. You just need to tell them to give you proof of delivery of the Credit Card and the Transactions that were done in your card, and wait for your response. There would mostly be some form of fraud on your Credit Card and you had never received it, there is no need to pay for the same.

You can collect all your communication with HSBC and share the same with the Head Customer Care at HSBC, the E-Mail will be updated on the website. If you do not get any response, then write to the Banking Ombudsman, the E-mail ID of which is updated on the HSBC Website, also keep a record of all the communication.

As you have not paid back the money (at least as far as their records are concerned) they would have reported your name to the Credit Bureau, once the case has been resolved you need to tell the HSBC guys to remove your name from the Credit Bureau, they can do it internally. Please do not leave them before they do this, else your changes of getting a loan subsequently may be affected.

If you have any further queries, do write into Ask.Pranav@gmail.com and I would be happy to answer any questions that you may have.

Also do check http://www.simplybank.blogspot.com/ for articles on financial education that may be useful to you.