Friday, October 12, 2012

Discipline and Dispute in Credit Cards

This article was originally published in Postnoon on October 5th, 2012, Co-Author: Anuj Hetamsaria


http://postnoon.com/2012/10/12/discipline-and-dispute-in-credit-cards/79604

Two days after our conversation on credit cards, once again there was a message from Sethu, blinking on my desktop. I put my coffee down with one hand and clicked on the Gtalk tab with the other. Even though taking a credit card is mostly harmless if one is disciplined in its use, Sethu is so suspicious about anything even remotely modern, that he is difficult to convince. He has more doubts before he applies for a credit card.

Sethu: I have heard that some of the shopkeepers charge an additional percent if the payment for purchases is made by credit card. Is it true?

Nicky: While most shop keepers or service providers do not charge anything extra, a few do charge about 2.5% extra if you pay by credit card. Also, some of them may not accept payment through credit card if the bill amount is very small, typically below Rs250 or Rs200. So, the ideal thing is to pay by cash if the shop keeper or the service provider charges an extra fee for payment through credit card.

Sethu: Hmmm...what about payments to online stores? Do they charge anything extra? Are they secure?

Nicky: Most of them don't charge anything extra. Site like flipkart.com, ebay.co.in or irctc.co.in have very secure payment gateways and credit cards are immensely helpful in making online payments. However, you have to be very careful with your credit card details like card number, cvv code, expiry date etc. Because, anyone who has these details, can make a payment online. It is a good practice to take benefit of services like mobile alerts. This will help you identify any payment that you did not make, immediately. You can then report misuse of the card to the bank and block your card to prevent further misuse.

Sethu: All this is fine. But don't you think that credit card encourages people to buy things they don't need?

Nicky: No. I don't think so. You cannot blame credit cards for lack of planning and discipline.

Sethu: You are right. But what if there is a dispute regarding either the credit card bill or charges or benefits?

Nicky: All banks have a well established grievance redress mechanism. Small issues can be settled at the customer care officers level. For the others, you may approach the bank branches, or write to the appellate or banking ombudsman. However, you too have to be careful about not signing any blank application forms or documents, provide correct details to the bank officials, take everything from the bankers in writing about the charges and the benefits, keep copies of all documents that you submit to the card issuer for your future reference, don't share your card pin or password.

Sethu: Thank you Nicky. I feel more comfortable now regarding applying for a credit card.
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