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Credit card woes? Go to banking ombudsman

Last updated on: June 22, 2007 13:37 IST
Have you ever been overcharged by credit card companies? Do you always tend to misuse your credit cards?

Do you possess more than one card and don't know how to make the best use of both? If you have run into huge credit card debts, should you go for a balance transfer or pay up the debt by taking a personal loan?

How can you fight credit card woes?

Personal finance expert Harsh Vardhan Roongta answered many such queries during an hour-long chat on rediff.com on Thursday. Here is the transcript:

Harsh Roongta says, 
Hello Eveeryone. Must apologise for the small delay in starting which was due to "technical reasons". So let's get started.

neha asked, i paid my credit card payment i have closed it also and i got the message saying that it has been closed but still the credit people are adding the interest for it ?
Harsh Roongta answers,  at 2007-06-21 15:03:59If you have written proof or a reference number based on which you can prove that the credit card has been closed by the bank then they obviously cannot charge anything after the date of closure. You should officially write a complaint on the bank's website and get a reference number. Give as much as detail about your complaint as you have. If the matter is not sorted out to your satisfaction within 2-3 weeks then file a complaint with the banking ombudsman. Details on www.rbi.org.in
Pravin asked, I have 3 credit cards of different banks how could i effectively use all these cards?
Harsh Roongta answers, I think you should concentrate on using your card only for planned expenses rather than trying to plan an optimum usage of the 3 cards. apnaloan.com has consistently recommended that a lay consumer should not try to juggle with financial committmenmts by doing balance transfer between cards. It is a cumbersome and time consuming process and a single delay means penalty and interest costs which will more than wipe out any interest benefit that you hope to enjoy by doing balance transfers.
neha asked, can the credit people have any authorization to draw the money from saving bank account without our knowledge if the payment is due for ex i have taken the card from icci bank and the loan is also saving bank account is also icci can they draw money like that ? Is it possible
Harsh Roongta answers, Yes ICICI Bank Credit Card has full authority to adjust any monies due to you from them against any due by you to them This is allowed as per international custom (called banker's lien) and is anyway also provided for in the card members agreement as well as the savings bank term and conditions that you signed with them when you started both these relationships.
Pravin asked, Is there any regulatary body which can give justice to credit card holders?
Harsh Roongta answers, If the credit card is issued by a bank (except for SBI card which is issued by an NBFC - most major cards are indeed issued by a bank) then a very effective authorty is the banking ombudsman.Details on www.rbi.org.in Before you file a complaint with them however you will need proof that you have filed a complaint with the bank at least 2-3 weeks before filing a complaint with the ombudsman.
AMIT asked, I have a sbi card. They offered me a loan of Rs.25000 @ 9.5% and the EMI was 2292 for 1 year. Now they told me that have to pay Rs.35 to 40 for government tax with every EMI. Is there any government tax on loan.Please guide me.
Harsh Roongta answers, There is a service tax on the interest charged on a credit card due @ 12.36% of such interest. So breakup the EMI into interst and principal (you can use this calculator to find this out - http://www.apnaloan.com/loan-advice-india/amortisation.html ) and if the amount is 12.36% of the interst portion it is likely to be correct.
Abhinav asked, i have a an abn amro card.these guys are not sending me statement on time and they have charged me for this, they are also not reversing the charge. i wont pay for fine.what i plan is to clear my genuine dues and cut the card
Harsh Roongta answers, I suggest that you do everything with proiper formal record so that you are not reported as a defaulter to the credit bureau. If you are reported as a defaulter you will have issues getting any loans or credit cards in teh future. In fact follow the complaint procedure outlined in the answer to an earlier question and get the charge waived off fully before closing the credit card so that it does not have any impact in the future.
Hyder asked, how to use credit cards in future
Harsh Roongta answers, You should use credit cards only as a payment mechanism. Pay off your credit card dues fully at the end of the month as revolving a part of the credit card dues can be very expensive. Plan your expenditure before you sue your credit card.
Smita asked, Hello Sir..I would like to apply for my first credit card.Which bank according to you provides the better service???
Harsh Roongta answers, If there was a single answer to that question then all other banks would need to close down their credit card divisions, wouldn't they. You can use the following link to compare the faetures of various credit cards before deciding which one to go for. http://www.apnaloan.com/credit-card-india/comparators.html
Sandy asked, The cheque towards my credit card statement was presented before the due date and hence bounced. now, they are insisting that it bouced due to insufficient funds, and they are neither accepting that the cheque was presented early not returning the same. they have levied late payment charges, finance charges, etc... Please advise
Harsh Roongta answers, I think most credit card member agreements provide that you cannot deposit post dated cheques for payment of your credit card (which seems to be what you have done as per my understanding of your query). You cannot also ask the bank to present teh cheque only on a particular day. Once you deposit the cheque with the bank -even if it is much earlier than the due date- it would be well within its rights to prsent the same immdieately. So it does not matter whether the cheque bounced due to insufficient funds or due to early presentment. I sugest you pay these charges ad write it off to experience. You can use the Electronic clearing service to ensure that the debit only comes on the due date. Most credit cards allow these facility today.
prem.u asked, sir, if were to cut the card and send it back to the bank will i be asked to pay the full amount in one shot or do i have the option of paying the min due amount?
Harsh Roongta answers, You will need to clear all dues in one shot.
Amol asked, Dear Sir, I have HDFC Gold credit card. If i not using my credit card in then what will be the charges for me.
Harsh Roongta answers, nothing unless there is an annual fee
neel asked, are loans offerd on credit card by the issuing company better than the personal loans.
Harsh Roongta answers, As a general rule of the thumb they are more expensive but it depends on your profile and the bank offering the credit card and a comparative persoanl loan.
poonam asked, pls answer what i should do.they keep phoning me fr payment.i told them since their office is far i cannot come thare ,is there any brach in south mumbai so taht i can meet them personally n sort this matter.they insisted saying i hve to come in andheri office omly.it is not their problem n i hve to meet them there only.
Harsh Roongta answers, If there is a dispute on payments only then you need to meet them else you can pay at any branch of the bank. But from the tenor of your question i guess there are some issues with the payment. I suggest that you take the time out for thsi because if you are reported as a defaulter to the credit bureau then you will find it difficlut to get any loans or credit cards in the future.
VijayDev asked, Credit Card Companies put your Debits on a real time (Online) basis, yet when you pay them by Cheque, your Savings Account debit of the Cheque happens earlier, an I find a delay of two to three days for the Credit of this in your Credit card Account. This is more true of Credit card Statement Close periods. Question 2: If you have a Credit balance on your Card (i.e., you pay more than the total outstanding, Credit card companies do not pay even a single paisa on this credit amount although they charge interest at 48% on your debits. Also, to top it all, if you have credit balances on your credit card statements, some of the card companies DO NOT even send you a Statement of Account!!!
Harsh Roongta answers, 1) Re: differnce in dates of debit in teh savings accunt abd credit in the credit card account - if it is the same bank then there cannot be difference. If the two banks are separate (but in the same city) there can maximum be one day's difference between the 2 dates. If your experience is anything contradictory please follow the complaint procedure outlined in the answer to an earlier question 2)That is banking for you :-) :-). But more seriously you are right. the only lesson is to never pay more. and if you do make sure to use it up in the next month.
poonam asked, sir pls answer my qt
Harsh Roongta answers, 
sagar asked, Dear Sir, I have a Credit Card and I have spent Rs. 45000/- on that. Every month I regularly pay the Min. Amount Due of Rs. 2500/-. This amount I have been paying from the past 18 months. So in a way I have already paid Rs. 45000/-. But the actual amount remains the same. How do I get out of it? What if now I dont pay?
Harsh Roongta answers, Please make a one time effort to clear off all your dues. If you have any securities than take a loan agaisnt them to pay off your credit card. If not you can also consider a personal mloan which will be cheaper. Else try a loan from family and friends. Dont make the mistake of not paying your dues as you will be reported as a defaulter to the credit bureau and will not be able to get any loan or credit card in the future
gnans asked, Hi Harsh ! i'm using HSBC gold card, so far i don't have any late payment charge, is it possible to convert EMI from existing one? be'z i want to buy a bike using the card and pay the amount in EMI
Harsh Roongta answers, check with your bank.It may have an EMI facility. A better and cheaper alternative might be to take a 2 wheeler loan offered by the dealer based on your credit card repayment track record. You could also examine a personal loan based on the same track record. Try market places like www.apnaloan.com for yoru needs.
NS asked, I had a SBI credit card about 2 years ago. The charged for insurance without my consent and did not respond to my repeated request on the same. When I stopped the payment, their agent came personally and settled for an amount and gave a receipt stating "Full and final settlement". But to mu utter surprise, I kept getting their bills and the payment that was made by me was merely shown as part payment. After a few follow ups with them, I gave up and kept ignoring the bills. Afterwards, whenever I have applied for new card with any other bank, it has been declined. I suspect that my personal record has been sullen for no fault of mine. Please advise. How should I clear myself in this matter.
Harsh Roongta answers, Your suspiciion is absolutely correct. Unfortunately most consumers do not realise that a "settlement" does not mean that the default is not recorded in your credit records. So if there is a disputed payment you should fight for getting it deleted rather than ignoring the amount. Whilst the bank may ignore it as the amount is small you will have an issue when you apply for a credit crad in the future with any bank or even foir a much larger home loan. So your credit record will determine your ecinomic life in many ways.
jatin77 asked, Why do petrol pumps charge 2.5% transaction fees over and above the cost
Harsh Roongta answers, Good question. Most shopkeepers pay a commission to the bank (about 1.1% to 2.5%) on the amount of purchases made by you using the card. This commission is paid by shopkeepers from their profit margins. See article "why do shopkeeprs accept credit cards" on www.apnaloan.com In the case of petrol these margins are very thin and hence the credit card bank has to recover these charges directly from the consumer
SHAMBHU asked, I AM HAVING CREDIT CARD WITH ICICI BANK . I PAID 9500/ AGAINST THE TOTAL OUTSTANDING OF 10400/ . IN THE NEXT BILLING CYCLE THEY ADDED THE INTEREST AMOUNT ON THE WHOLE AMOUNT NOT ON THE REST AMOUNT. Is this according to rule
Harsh Roongta answers, good question. You will need to pay interest on 10400 from the respective date of purcahse till the date you paid Rs. 9500 and on Rs. 900 from that date till the next due date.Unfortunately that is the rule.
GRB asked, Harsh:I am holding ICICI,CITI BANK & HSBC BANK CREDIT OF WHICH I AM USING ICICI BANK CREDIT CARD. THE OTHER 2 CREDIT CARDS ARE NOT USED SO FAR. PLEASE ADVISE ME WHETHER I SHOULD CANCEL THESE 2 CREDIT CARDS WHICH ARE NOT USED BY ME?
Harsh Roongta answers, Use your credit Cards with care. Unless you are of the type who needs a credit limit because of unplanned business expenditure you should stick to at most 2 credit cards (preferably one Visa and one Master).
pankaj jain asked, Please give me suggestion of use Credit Card?
Harsh Roongta answers, Credit card is only a tool for payment. Buy only what you can afford and you need. As they say be responsible while spending and dont overspend just because you have a credit card.
sanju asked, hi harsha I visited abroad, for online advance hotel booking I gave them the 16 digit number of my credit card and also the validity date. Later on I made cash payment for the hotel. I just want to know if they can withdraw money from my CC without my knowledge, If no why they asked this information as a guarentee?
Harsh Roongta answers, Even if they do, you can always dispute the payment. As long as you can prove the cash payment the payment is most likely to be reversed.
Harsh Roongta says, Ok Guys. My fingers just gave out. So bye for now and see you on the next chat.


Harsh Roongta is the CEO of apnaloan.com , a site that help people get the most competitive loans. He is also the co-author of a popular guide to home loans, Complete Home Loan Guide.