Here we go .. the second and last part of credit card story. I had no intention to carry over my indian credit cards when I came to USA & don't you guys worry I didn't do it either. :)
I came to USA with $900 only & never knew about credit card system down here. It really took me a while to understand. After a month I got my SSN and my friend took me to Affinity Federal Credit Union to open a bank account. The lady down there explained me to about secure card. I was ready to open a savings account with $500 and have $400 in the secure card. The lady said it will help me to start building my credit and believe me I never understood what she was talking about. God knows why but she offered me with a credit card. I remember I was sort of flirting down there .. oh .. not real flirt...just a sweet one... now please dont ask me what's a sweet flirting ..we are talking about credit cards here :) !! My first credit card here in USA had a credit limit of $1500. The golden rule here is swipe the card for all the services & utilities. That covers apartment rent, bills for electricity, cable, water, laundry, mobiles, cable, internet, health insurance, car insurance, hospitals, grocery & daily shopping. But the mantra to build a good credit history is pay your bills on time. no matter if that is the minimum payment due on your credit card or any other utility bills that should be paid before a certain due date. It's also important to pay on time your debts like car loan, home loan or any other loan for that matter.
So what is credit history?
Well not a subject of this discussion... but certainly makes sense to talk about it as it's the most relevant subject here. But since I am not a expert on this, I will let Wikipedia to the rest of the talking. So check this if you want to read more http://en.wikipedia.org/wiki/Credit_report
And what's credit score?
Again as per Wiki, it is : a number typically between 300 and 850, based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her bills. A credit score is primarily based on credit report information, typically from the three major credit reporting agencies.
May you want to know more, read this http://en.wikipedia.org/wiki/Credit_score
What happened to my credit card?
Yes .. after just a little diversio on the credit history & credit score..let's get back to the main story. After spending 3 months with $1500 credit limit, I started feeling the need of increased credit limit. I applied for a raise on the website of Affinity FCU. I asked for a credit limit of $8,000. But they politely refused it and gave me a limit of $2,000 & again after 3 months I asked for a revision and this time they helped me to feel better :). So far .. So good !!
To summarise
1. The credit card systems in both the countries are very different. In India it is more commercialised where as in USA it is in favour of customer's interest.
2. In India, there is a room to abuse the system by inappropriate use of either your own card or somebody else's card whereas here in USA they vigile customer from any misuse. There is a system called 'Fraud monitoring'. If your card gets swiped say more usual than often or for bigger amounts than you usually use for, the credit card company calls you and confirms if you wished to swipe or something wrong is happening with your card.
3. In USA, there is a centralised system where each individual and his credit history is tracked using his 'Social Security Number' (SSN). That leaves very less scope for frauds & scams. If you mess up your credit history, you need to pay higher insurance charges and you may not be eligible at all for new debts. In India, we lack such system and people who know how to make worst use of these deficiencies often take advantage.
3. Well ...still credit card frauds exist in both the countries. In USA, we are always warned not to accept 'Pre approved Credit Cards' as it might lead to 'Identity theft' or similar issues.
4. Interest rates for outstanding balance are high in both the countries
5. Credit cards are fancy in both the countries. American Express is my favourite card. The latest is mini card which fits in your keychain.
I heard from one of my friends that Japan has even gone further and they are using mobiles as a credit card. If anyone know about it please contribute to the post. We will be very much thankful.
Well... I guess you guys enjoyed reading my blog... please leave your comments... it will help me to improve. See you around... Happy Blogging !!
- Mumbaikar
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