In a shocking development, India’s Banks and Credit Card companies have withdrawn the most essential safety measure for Credit Card Holders against fraudulent transactions –
outstanding liability insurance.
What does this mean ?
Say, I am physically located in Bangalore and someone else is using my credit card to shop in Mumbai over the Internet or maybe by actually swiping the card. In such a case as a card holder I am not liable for those purchases and the outstanding liability insurance will take care of this.
Purchases made on lost cards are listed as disputed transactions and until the matter is resolved, the affected customers are included in the defaulters list. As long as the defaulter tag remains, such customers are denied other credit facilities including home loans.
Shameless and Consumer unfriendly credit card companies in India have withdrawn this benefit for consumers holding credit card with no annual fees.
Analysis & Conclusion:
The delinquency on credit cards has quadrupled to Rs 7,000 crore in a year. Banks claim that the premium on insurance cover offered to credit card holders has shot up, that happens only when banks start claiming way more than what they pay. This is a VERY VERY fluid situation.
The RBI has finally opened its eyes and is drafting a new set of rules for Credit on Cards to Indians. Many companies do not check the repayment record of the borrower and issue high credit lines and then start harnessing as was the case of ICICI Bank in Bangalore.
Remember Credit Card is no FREE Money. Kindly use it wisely.