A personal experience with credit cards

I want to tell you my personal experience with credit cards.

I started with a single card from Standard Chartered Bank in the year 1990. This was a Master Card, very soon they sent me another free card with Visa affiliation. Thus I had two cards.

One of my friends was working in a DSA for ANZ Grindlay's bank and he requested that I take a card from him in a particularly lean month of sales for him. Thus I got my third card, very soon ANZ Grindlays sent me another card with Visa affiliation. Thus now I had four cards.

I very soon acquired another credit card, this time from American Express called the green card.

At this point of time, I was feeling on top of the world. I had a combined credit line of more than 5 Lacs, which at that point of time meant that I could buy a house using just my credit cards!

All through the time, I used my cards judiciously and never maxed them out, although the temptation to do so arose on many occasions.

Being in the IT industry, I fell into a debt trap following the dot com bust that happened in year 2000-2001.

I now had an outstanding on my card and no source to pay it up. Very soon the bill collectors were on my back. I had to answer one harassing call after another.

Sometime in June 2001, I settled with the credit card company and paid them their outstanding dues after getting a discount from them.

But before I did this, I did my home work. I insisted on a settlement letter from the company (Standard Chartered Bank, which by then had taken over ANZ Grindlays) before I made my payment to them. For some strange reason they asked me to pay 96000 in six installments of 16000 each even when I offered to pay them in one go.

Later on I learned that this was another of their dirty tricks. What they are banking upon is that the payer will falter and in their settlement letter they mention that even if you miss out on any one payment, the settlement stands canceled and the money already paid stands forfeited!

Anyway I managed to pay all the installments in time. But I kept getting their statements showing outstanding dues for the next 1 full year. When I complained to them, they said that it takes time for the statements to stop. This I found hard to believe given the fact that everything they do is computerized and they have the ability to suspend a card within an hours notice. During this period when the statements were still coming, I had to confront a bunch of bill collectors, who I could ward off only when I showed them my settlement letter along with the receipt of the payments that I had made.

I held on to the American Express Credit Card just in case of any emergency.

During this time, I have had to fight American Express for waiver of charges on many occasions. I once withdrew cash of 8000 and they levied me two separate charges while it was their system that was at fault as it did not allow withdrawal of more than 5000 from the ATM. When I took this up with them, they reversed the charges.

Tell me, is this not a trap? How many people must have been shortchanged this way?

At the time of renewal of this card, when American Express charged me the annual fees, I refused to pay and told them that they could cancel my card. They waived the charges and I have not paid any annual fee for the last three years.

On another occasion when I paid my monthly dues at an American Express Bank branch, my cheque went missing. Inexplicably this happened at their own office. They put late charges on my account and also charged me interest for the delayed payment. I once again fought with them and accused them of probably shredding my cheque just to levy late charges and interest. When confronted thus and in the light of evidence that I had always paid on time everytime, they had no option but to reverse my charges.

Thus the readers should remain vigilant of all the charges that appear on their statement and fight back to have charges they don't agree to be reversed. Using a credit card only in emergencies or in situations where cash is not accepted is the best way to handle them.

Do not make a costly purchase on your credit card. Save for such extravaganzas. If you do make such a purchase opt for the EMI scheme from the company. This carries a much smaller percentage rate on the credit that you avail.