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 (Barclays Credit Card) - No Statements Sent but Charges Levied

Customer Says

I was holding Barclays credit card 4339481234567890 which was given on some promotion. I commited a mistake of using this card on 18-11-2007 for purchase of Rs 2174.00. I did not recieve any statement for this.Instead i recieved a call for payment. I was shocked but I was assured that any late payment charges shall be reveresed.Subsequently I sent payment of RS.2200 which was duly credited to my a/c on 28-12-2007.

But the bank kept on calling & sending statements inspite of card being suspended. Finally on 28-06-2008 AARTI came on line to inform that late payment charges can not be waived. I asked for supervisor & Mr Ranjit (Supervisor as told to me ) THAT HE CANNOT TAKE ANY REQUEST OR COMPLAINT ON A SUSPENDED CARD. I IMMEDIATELY ASKED HIM IF THEY CANNOT TAKE ANY COMPLAINT THEN HOW THE BANK CAN CHARGE INTREST OR OTHER CHARGES ON SUSPENDED CARD.i ASKED FOR MY COMPLAINT NO WHICH WAS 1897164 DT 28-06-2009.

Mr Ranjit told me to check status after few days. On 10-07-2009 Rashmi told me that this is not a complaint no but a REF>NO> ONLY. IT WAS SUCH A SHOCKING EXPERIENCE. Looking forward for early redressal.

Ask.Pranav Says:

This is a standard complaint received from most users of Barclaycards. The Statement Process is poor and the charge reversal policy is also not implemented properly. You need to do the following.

(1) Write to the E-Mail ID provided on the website which is service@brclays.com
(2) If you do not get a response write to the Nodal Officer which is Mrs.Meera Rawat and her Contact ID is provided on the website
(3) If she does not respond, write to the Banking Ombudsman for help \

It is very important that you remember the dates on which you spoke to the bank and all the written communication and have copies of the same. It is important that you submit the same to the Ombudsman when you do not receive a satisfactory response from the Bank for 45 days.

I suggest you do not waste any time reasoning out with the Barclaycard Contact Centre folks. It is an absolute waste of time. Just patiently make your point, record your call and hang-up
Also do visit the following website on http://www.simplybank.blogspot.com There are several articles on Credit Cards posted here which may be of use to you

Case Study (SBI Credit Cards) - Rs.500 Late Patyment Fees on Outstanding Less than 50 Paise

Customer Says: SBI Credit Card

HARRASSMENT BY APPLYING UNJUSTIFIED CHARGES: I was using the SBI GOLD card no. 431751234567890 from 2006 to JULY-2007. In one of the payment i made payment of the amount excluding the fractional amount, e.g. Billed Amount was 884.23Rs. & made payment of only 884Rs. to make it round figure. But in the next months statement the bank charged me late fees for the remaining 23 paisa.

When I requested their customer care executive for reversal of the same he refused to do so. I stopped making payment of that late fee, and repeatedly requested customer care to consider it, but all in vain. The same is going on and the latest amount due against the card in the month of June -09 is of 2476.90 Rs. Now I am fed up of talking with customer care department, as they are not at all ready to understand my issue. Sir, I want to bring it to your notice that if really I wanted to cheat the bank, I would have used the card further also as the credit limit over my card was of Rs 52,000, but I never did that. You can even verify my track record before this incidence. I hereby request you to please look into this matter kindly and give me the reversal of the amount whatever you charged me. Otherwise it will be a big injustice with me.

Ask.Pranav Says:

Hi, I faced a similar problem with my Barclaycard. The issue is that most Credi Cad issuers allow a short Payment of Rs.100 on the Total Amount Due. If you pay Rs.100 less than your Total Amount Due, you will still not be charged any Interest.

However Banks likeSBI Card and Barclays do not follow this practise. Hence all customers have to be very careful and ensure that the full amount de is paid to the nearest Paisa. I suggest you do the following.

(1) Register a Case with the Banking Ombudsman stating that you had not paid a few paise and the Late Payment Fee Charged has been Rs.500+ for a short Payment of 23 paisa.Word the letter saying that the Late payment Fee cannot be 1000% of the Payment Outstanding
(2) My bigger worry for you is that by now, they would have reported your name to the Credit Beureau completely ruining your Credit Card. Fo more details on what this means you can visit the following article which explains what a Credit Beureau is.
http://simplybank.blogspot.com/2009/04/what-is-cibil-credit-bureau-and-why-is.html

I suggest you pay off the amount and close the matter as it is very important to have a good Credit Record these days. For any further clarifications you can write to me at Ask.Pranav@Gmail.com or visit my Blogsite on http://www.simplybank.blogspot.com I am sure you will find some articles of use out here.