Before You Buy a New Credit Card Read the Fine Print

While selecting a credit card, a user may want to take into consideration various elements like annual fee, transaction charges, late fee charges, over-limit (amount withdrawn over and above the limit of approved credit card limit) charges etc. While credit cards have their own benefit, they warrant greater responsibility also.

At the time of issuing a credit card, the credit card issuing banks, or their agents (who are sometimes commission based and out-sourced) seem to be very sweet. At this time they are even ready to ignore some of their conditions in a hurry to grab the customer and to issue the credit card. They even ignore prospective customers’ financial standing

You have got a credit card and you are happy. But this happiness is likely to turn soon into nightmare once you find it difficult to either in repaying in whole or in making regular minimum payment. Indian consumers are not at all happy the way banks authorized third party debt collectors and settlement agencies are working.

Credit card interest rates add up to more than 30 percent and in many cases, goes up to 50 percent where late payment and interest is added up. Although Reserve Bank has from time to time issued notifications for fair practice, banks swear by them but practically they do not seem to following up the RBI directions in letter and spirit.

Mr. C. V. Giddappa, general secretary of the Credit Card Holders’ Association of India (a very important organization which looks into the interests of credit card holders in Bangalore), pointed out that “These banks are cheating the public”. Mr. Giddappa’s organization estimates that Indian consumers are paying 16.4 million rupees a day (more than $406,000) in unfair charges, and is agitating for a debt-free India by 2020.

Monopolies and Restrictive Trade Practices Commission (MRTP), Government of India has started an investigation of card-selling practices of banks including Citigroup, HSBC and the local banks ICICI and HDFC.

It is very important that before getting into the world of credit card full understand its terms and conditions, hidden and open. You may want to understand your needs. Do you really need a credit card or you are just buying it to boost social status.

Reserve Bank of India keeps an eye on the credit card issuing banks that they strictly follow best practices in issuing the credit cards, debt collection and other related services. To protect consumers rights, Reserve Bank of India issues Notifications from time to time and oversees its implementation. You can click this for more information.

At the end of the day, the mantra is buy a credit card only when you feel it absolutely necessary to have it. Otherwise, debit cards are good enough. If you keep your needs and wants within limit, there will never be any need for a credit card. Avoid as far as possible.