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 Everyone. Welcome to this chat. I request you to read the chat transcripts to see if questions similiar to yours have already been answered. So let us begin
Prashant asked, Hi.. This is prashant.. Iâm using my Citibank credit card for more than 5 years. I had a problem in july month. I dropped a cheque of 65k in the ATM center on the due date. They cleared it after 10 days in imposed a fine of around 4900 on me. After several talks, they have reverted only 1300. how should I fight this.
Harsh Roongta answers, at 2007-10-09 14:04:22Most banks normally will not charge for a one working day delay to provide for the delay in clearing the ATM boxes. However technically they might not be wrong in charging this interest especially as you have no prrof about dropping the cheque on the due date in the ATM Box. You can try and fight this out though my advise is to pay up this time and then pay in advance in the future. A better way is to pay through ECS to avoid all such hassles. If you let this amount fester it may adversely afect your credit ratings and make access to loans/credit cards very difficult in the future.
tirkey asked, Why credit card companies do not want to close cards if one wishes. How to handle this and get card closed? Please suggest
Harsh Roongta answers, Make full payment of all outstanding due amount. Then cut the card into pieces with a scissor and return to the bank with a request for immidiate cancellation. Ensure that you get acknowledgement of this letter (do not send it to a post box address).
shivani asked, hi, i came to know after 5 days that i cannot fond my citibank card... and when i checked online i saw that there were 3 transactions done by somebody worth 16,000/-. I immd contacted bank and told them to stop the card and bank told me that you are liable to pay fr these transactions! Just seeking your advise on this..... thanks
Harsh Roongta answers, You should raise a dispute with the bank regarding these payments as obviously the cards have been used fraudulently. Raise the dispute in writing (with due acknowledgement)and if this is not resolved satisfactorily in 1-2weeks you can file a complaint with the banking ombudsman appointed by RBI (details on www.bankingombudsman.rbi.org.in)
vg_pal asked, I had Rs 30000 to pay as per my previous statement (2 months back). I had paid Rs20000. Remaining amount is Rs 10000. For what amount the intrest is charged. The bank has charged for the Rs30000. Is this correct?
Harsh Roongta answers, When you choose to pay only part of your total credit card bill (in your case you have paid only Rs. 20,000 out of the total bill of Rs. 30,000) the facility of interest free credit is withdrawn and you need to pay interest from the day on which the expenditure was incurred till full payment thereof. Not many consumers are aware of this mode on interest calculation though all banks follow the same mode of interest calculation. This is one of teh reasons why at Apnaloan we advise our clients to use credit cards only as a conveneient mode of payment as well as temperoroy credit and not as a borrowing mechanism.
anand asked, Hi Harsh, this is anand,I have a HDFC creditcard. I had made some transaction on my card using i had get 10000 on cash advance on last month. The actual transaction charges for cash advance is 2.5% but they charges 12% of my last cash advance Transaction. So please don't transaction HDFC bank Creditcard. The HDFC bank emplyoees are totally cheating all the customers and people.
Harsh Roongta answers, I think there must be some error in your understanding. Apart form the fee the interest on cash advance begins from the date of withdrawal itself. Perhaps that is the source of confusion for you.
AMIT asked, Good Afternoon Mr. Roongata - My question is I have a total debt of 60,000 (30000@1% - BT) & 30,000 @ 3%. Kindly advice how to shed this total debt.
Harsh Roongta answers, Firstly no solution will work unless you stop piling fresh debt on the credit card. So firstly resolve not to use the credit cards in future. Secondly the best way is to take a loan against some security (insurance policies with high surrender value, bonds, shares, used car, property, jewellery, etc.)to pay off the credit card debt. If you have not defaulted on any payment you can also consider a personal loan to pay off the credit card debt. Best option off course is to dip into savings or take freidnly loans from relatives/friends.
ganesh asked, Hi Harsh,i was holding 4 credit cards from diff banks and defaulted on all of them at some point of time.then i paid all my dues and closed all of them.Now I want to apply for a home loan and please tell me how my past deeds will affect my home loan eligibilty and will ever i be able to get a home loan?
Harsh Roongta answers, You are going to have a tough time getting a home loan especially if the credit card issuers have written off some amounts while settling with you. All banks will know about your default through the credit bureau. You can try and raise lower debt (say at only 60% of the purcahse price instead of the normal 85%) or provide some additional security such as shares/securities/etc. You can also try to take this loan from local cooperative banks who may be able to better verify your current status and hence may be willing to provide the loan though on more expensive interest rates.
pp asked, Hi Harsh, 1 year back I closed SBI card but still they are sending monthly statment with Rs.00 outstanding and whenever I ask them they tell that card is not closed. Please tell me solution
Harsh Roongta answers, Urgently send them a registered AD letter cancelling the card and making it cloaer that you will not be responsible for any dues on this account. Do not treat this lightly as this may affect your credit ratings especially if fees and charges are levied on this "card".
rajiv asked, i had a citibank CC valaid till april 04 , after it expired they automatically renewed it and have been sending me bills for annual fees , late fees etc. On speaking to them on phone they take down the request to end teh card but again do nothing and keep on sending the bills i have never used the card since apr 04.Should i be worried about these bills?
Harsh Roongta answers, You should be very worried as you would already have branded as a defaulter in the credit bureau for "defaulting" on these fees and the consequent late payment charges, interst and penalties. Immeidately file a complaint with the bank thorugh the lkink provided on its website for this purpose and if the matter is not resolved to your satisfcation you can approach the banking ombudsman. details on www.bankingombudsman.rbi.org.in
sandeep2505 asked, Hi, I was holding ABN AMRO Credit card, I had due of Rs. 29100/- but after some time bank and I came up with some common solution and agreed to pay Rs. 12000/- towards the settelment of account. I paid all the RS. 12000/-. This is the things of last year, now since last few days I am receiving calls for the same card to make the payment of Rs. 16000/-. Now I dont know for what they are asking me for this Rs. 16000/- And they are threatning me that they will send my details to RBI. I had provided them these detials every time they calls, but no use. Please tell me what to do
Harsh Roongta answers, If you do not have a letter or agreement from the bank stating that the payment of Rs. 12,000/- was in full and final settlement of all dues on the credit card the i am afraid you have a battle on your hands.
Vinod Mishra asked, Dear sir i was lost my credit card when i relaised that mean time some body had done transaction on that. now banker are telling me that, all the purchase that are done by other person have to bear by me. i have already stoped using that card na i have issued notice to disconnect my card and all the balance except purchase which was not done by me
Harsh Roongta answers, Do not treat the matter lightly. Please raise a dispute with the bank officially either through its website or by way of a letter sent by Regd. AD. If the matter is still not resolved you should approcah the bankiing ombudsman. details on www.bankingombudsman.rbi.org.in
cardholder asked, Hi, I was once charged undue late fee by a credit card who refused to revert it and used unprofessional ways to collect it. Is there any forum where I can complain about this kind of behavior?
Harsh Roongta answers, First complaint to the bank officially either through a registered AD letter or through its website. If the matter is not resolved please approcah the banking ombudsman. www.bankingombudsman.rbi.org.in
Sundeep asked, Why dont banks use the sms facility to intimate the customers of a transaction on their card. Incase, of a fraud, the customer can at worst be informed after the first transaction. I see that the ICICI travel cards give this facility to their customers
Harsh Roongta answers, a lot of banks provide this facility. So take cards only from banks that give this facility.
raj_gupta asked, my credit balance has become 50,000. Now i wish to repay in 6 EMI.. bank people say this facility is not available with ur card (HDFC silver card) ... what shd be the way to sort out this matter.. Shd i take a Personal loan for this?
Harsh Roongta answers, You can take a perosnla loan or also take another credit card which allows balance transfer at a low rate. see this article for more savings. http://www.apnaloan.com/articles/credit-card-india/Creditcardstricksoftrade.html
kesav asked, im using citi bank card with limit of 46000rs. They incresed my limit upto 77000rs im not need of credit limit incresing. If im utilising 77000rs and im not paying full amount what can they do?
Harsh Roongta answers, apart from taking loegal action your default will also be reported to the credit bureau thus making it almost impossible for you to get another loan or credit card in the future.
ajay asked, MAY I KNOW THE MINIMUM SALARY ELEGIBLE TO APPLE FOR A GOLD CREDIT CARD
Harsh Roongta answers, around Rs.25,000/- pm. but will depend from bank to bank.
Pramod asked, Hi sir I have a credit card of BOB and they say a min amount to be paid, what it means R they charge after due date ? what is there word defination I can not under stand. pl expalin me.
Harsh Roongta answers, Please pay the full amount due if you can. If you only the minimu amount then interst will be payable as well as you will loose the interest free credit period.
Dhruv asked, Mr.Harsh, What is the best way to clear o/s of Rs.2.5 Lacs on 4 different cards?
Harsh Roongta answers, This has already been answered in the context of a similiar question.
acacio asked, why do some vendors charges 2% extra on purchases and some dont charge is the charge justified or legal one ?
Harsh Roongta answers, As per standard rules the vendor may charge extra for credit card payments on sale items or on restricted merchandise (such as petrol, railway tickets,elctronic items, etc.)
dimpee47 asked, sir i had several cards and i used it extensively. I had never defaulted and paid all of them regularly. Problem started when I got an oppurtunity to do pursue my masters in foreign country and dint able to pay the card company as I toook lot of laon and all to complete my studies. I called all the card companies and told them I will start paying once I get the job, but they all keep calling again & again in my earleir office. what needs to be done on this issue
Harsh Roongta answers, Well the fact is that by neglecting to provide for this debt you have craeted a big problem for yoruself when you return to India. You will not be able to get other loans or credit cards (and also your education loan lender may refuse to give you the next installment of the education loan if the fact of your default gets known to him). My advise is please take the time to make some arrangement for this on the lines suggested to some other particpants earlier in this chat.
gsvatsa asked, Is there any credit card which gives 0% EMI option on insurance premium payment?
Harsh Roongta answers, I am not totally sure but i think that you can get 0% EMI option on some policies of ICICI Lombard Insurance if you pay by credit card online.
ram_1582 asked, Sir, My Bank does not allow me pay in advance as they say do not drop oost dated cheques, furhter, their atms do not have cash deposit fecilities and then If i pay through their bank counter, for every deposit towards the credit card, they charge a fee of Rs 50/-. They expect me to deposit the cheque towards credit card only 2 days before the due date. Any thing can be done on this?
Harsh Roongta answers, Please use the ECS facility.
Narayan asked, What if we do not pay the credit card amount and change all the details including the phone number and address
Harsh Roongta answers, Not at all advisable. You will never get another cerdit card or a loan quite apart from facing legal action from the concerned banks.
Praveen asked, I am having ABN Credit Card, and few months ago I use to get calls from ABN Amro for recovery of the amount which is not mine. The card no. is different and the name is partially correct. When i enquired with the recovery people i was told that there is one more card which was taken, using my ICICI card as the base card. When i saw the document, the statement was mine But all the deatils including name date of birth and other details are different. This shows that some one as misutilized and documents and got the credit card. I want to find out how to take action on ABN AMRO for giving the Credit Card without enquiry as none of the detials match with mine. Pls. let me know what can be done in such case
Harsh Roongta answers, This is clearly a case of stolen identy and is a criminal case. Please file a complaint with the police immediately. also file an official complaint with the bank disclaiming all responsibility for the dues on the other card and use the banking ombudsman facility if the matter is not resolved to your satisfaction.
DEepak asked, Hi , I am Deepak .Citibank Cards sent a cheque of Rs 1 Lakhs for laon to my Address even after my refusal of loan.When I contected them , they said OK you can return the same through cheque and I did the same within 20 days of their chequq. Now, They aretelling me them you have to pay EMI every month for 48 months and refusing to close this and threatening legal actions . Please help
Harsh Roongta answers, co mplain to the banking imbudsman immeidately.
Rajnair asked, Harsh, I own an hsbc credit card but have never used it. It's a life-time free card with no additional charges. but still i get a monthly/quaterly statement for the payments. Could you please tell me if it's really free 4 me or I need to pay some hidden charges even if i dont use the card. How can i return the card to the company back???
Harsh Roongta answers, Unless you provide details as to what the charges are it will be difficult to answer this question
Nimesh asked, Sir, how sensible it is to use credit card for overseas purchases especially when one does not know at what rate the currency is fluctuating.
Harsh Roongta answers, The cheapest way to spend overseas is to buy the the currency of the concerned country and spend the amount there in that currency itself.However not all currencies will be easily avialable with delaers (normally major currencies such as dollar, pound, Euro, Yen, Sing Dollar, etc, are available).However this runs the risk of carrying cash. Also it is not fasible for large amounts. In which case you can alo consider travellers cheques.
Atanu asked, When I give the credit card in some retail counter, they often take it inside for swiping it. Can they swipe the amount more than once on my credit card ?
Harsh Roongta answers, Yes they can. The best way to cheack this by subscribing to an SMS fgacility for all debits above a certain amount.
siva asked, I was using HSBC Card in 2004 . After Nov 2004 i stopped using it , but that company started adding latepayment , interest ,annual fee from 2004 . Now it has come to 20000 Rs . Can you please help me how to stop this. If i dont bother the inflated bills what will happen ? .
Harsh Roongta answers, similiar question already answered.
asasa asked, which is the best credit card bank or company you would suggest for a student just started working in gurgaon
Harsh Roongta answers, Make sure to use the credit card wisely and refrain from overspending just because a credit limit is available. This is far more important than the brand of credit card you apply for. You can compare features of various credit cards and apply online for credit cards on www.apnaloan.com or other similiar market places. http://www.apnaloan.com/credit-card-india/comparators.html
Harsh Roongta says, Whew - the interest level in this chat has been humungous and the level of interactivity has been very very high. I need to sign off now. But please read the chat transacripts as they contain the answer to most of the questions that have been raised in the chat even though your specific question may not have been answered due to time constraints. You can also use this link for any further doubts or queries. http://www.apnaloan.com/credit-card-india/index.html
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.