Credit Card Complaints Grow at 31% YoY

The Number of Complaints received by the Credit Card Company ombudsman shot up by 31.46% in FY2007-08. Total complaints received were 10,107 of which 3,087 were related to MNC Banks and 7,020 related to Indian banks.

The RBI is currently undertaking a study on the credit card operations of Banks which also includes issue of unsolicited credit cards. In case of an unsolicited credit card being issued and the same is not being received by the recipient, then the recipient is not liable for any dues arising of fraudulent transactions. If the bank insists or sends a collection agent for collection of dues, the recipient / consumer can actually file a complaint against the bank and get the amount equivalent to the dues as reward for harassment from the Bank.

Credit Limit Cuts + Raise Interest Rates

Indian Credit Card companies which operate like the underworld, have started cutting credit limits of customers who fall in the line of sub-prime borrowers. The tight liquidity in the financial market has triggered this measure.

Taking advantage of this situation, they have also raised the interest rates on credit cards. SBI has raised the rates for credit card customers from 3.1% a month to 3.35% a month. HDFC has raised from 2.95% to 3.25%. The rate increase is mostly effected to persons who have missed payments in the past putting them in delinquent category.

However, premium card members with limits above Rs 200,000 are unlikely to see any downward revision in their limits as banks like to pamper them.

Do not ever get into the credit trap of these companies. The rates are extremely high and we strongly recommend to AVOID these credit card companies and doing business with them if you are not capable enough to pay off the entire balance at the end of each billing cycle.