Credit Cards : Part 1

It's an intereting topic for me to write on. As promised yesterday, I am going to compare two extreme realities : Credit card system in India & USA. Today I am going to share my experiences about Credit Cards in India. Yes, It's a big enough topic !! I have used credit cards in India for about 8 years & wonder how much the industry has earned on me.

My first Credit Card
We always remember the things which happen first time with us. No matter good or bad !! I remember, the first credit card I got was from Citibank when I was in collage and just earning 3,000 Rs as stipend. I was staying in hostel these days & one fine day a team of marketing executives came to our hostel. It was a sunny afternoon & I was sleeping happily in my room. Appearenly the guy knocked my door and I didnt open it thinking someone is there to take me to lectures. I would have been happy for years later, if I wouldn't have felt jealous that evening about my friend getting a credit card and not me. I remember next day afternoon I almost chased the marketing guy and got my application filled up. He was more than happy to offer me a card. Later I came to know those guys get almost 500 Rs for each application. The credit limit on my first card was about 28,000 Rs which I used in 6 months.

Ace of Cards !!
By the time when I got into my first job I never cared to close that card but in my first week of job I picked up about 3 more cards. I was crazy about those colourful cards & it were like proud moments every time I received a new credit card. As a fresher in my job, I used to usually get 'Standard' or 'Siler' credit card. But I always wanted a 'Gold Card' & at one point of time I paid 1200 Rs yearly fees to get a Standard Chartered Gold Card with a very less credit limit. Slowly I got the skills to negotiate for good credit limit and get rid of the yearly fees. Collectively I had a credit limit of close to 3,00,000 Rs at a point of time & almost all the major credit cards in my wallet.

Marketing skills learnt while attending marketing calls !
I wonder if I really would have bought these cards if 'Priya', 'Soniya' or 'Shweta' TYPE girls wouldn't have called up on my phone to sell those cards. Really don't know from where they used to get our numbers. Sometime we used to think they just know one phone number and then they try all the number in the serial order. Because if I used to hung up a call immediately the guy next to me used to get one. We often used to make fun of those calls. I remember we were attending a meeting on a technical subject in a conference room & the speaker phone in the conf room started ringing. Someone picked up the call & the girl started pitching ..and in a minute there was burst of laughter in the room. I became a marketing guy just by attending these calls. My negotiation skills improved. Well ...couldnt really negotiate with my boss for a better salary though. The most common situation was cancellation of the card. I used to have cards that I never used to swipe & after a year I used to get a card statement saying I need to pay 700 to 1000 Rs. I used to call the customer care and the sweet voice on the other end used to convince me why I should keep the card for another year as they were waiving off the fees. At times they used to offer me increased credit limits. I used to note the change in the tone of the girl on the other side. while offering a card she used to be so sweet & while cancelling it used to have a pinch of rudeness.

How I used my credit card ?
For a couple of last years I consistently had a outstanding balance of almost 1,00,000 Rs or more. Well no magic !! I used to swipe the cards for almost everything. The scheme I liked the most was buy today and pay later in installments. I used to calculate but never could get my calculation right. I always felt they run those schemes for our benefit & no doubt I was wrong :)
I used to take even cash advane when I used to need quick cash while my savings account was empty. With so many dues & so many cards I used to miss the payments some times & they used to give me a chance to pay it next month but at the cost of late fees & heavy interest. The late fee usually was 100 to 250 Rs & interest used to be almost 2% on the outstanding. My family used to wonder where do I spend my salary and when they came to know about the credit card stories, my father helped me to close some cards with major outstandings. we often call it as 'Debt consolidation'. But in 6 months the balance again built up on another card. That was precisely when I got married :)

Why did I use Credit Cards?
In my case, it was often when I wanted to buy something for which I didnt want to wait for another month or two. Like I bought a TV during world cup time, Refridgerator when summer was getting hotter and my wife thought it was impossible to stay without drinking cold water, wanted to fly to mumbai when there was only 4 days holiday and train journey would have taken 2 days, throw a birthday party first for office friends, then for school mates , then for B.Tech friends & last but not the least for my girlfriend. At times I used to get attracted to the schemes they used to run. For example, Spend 30,000 Rs in 1 month & get a DVD free. I remember spending almost 50,000 Rs in order to get 6 piece travel set because I didnt want to spend any extra money to buy a suitcase when I came to USA. The travel set never reached me & I had to spend another 6,000 Rs to buy a VIP suitcase. :) Yes.. I swiped my card. I was sometimes crazy about the points and the gifts they used to offer when we redeem these points. But I remember i got just a so called leather handbag which was very dusty. But when my wife asked me about the dust, I said it was the texture and not the dust :). To whom I was fooling... Yes.. to me !!!

Credit Card Recovery Team... Fact or myth ?
All of us must have heard that the credit card companies treat their customers very badly when they go for recovery of the outstanding balance. I have seen it personally. I once went to the recovery office to close a credit card. The office had a tele marketing team usually young guys. I have heard these guys talking rudely to the customers like When are you going to pay ? Why didnt you think while spending ? Do you want me to come to your place and collect money ? This team must be getting incentives on how much they recover a day and that really makes them aggresive with their customers. I have seen such a guy who literally abused the customer using a faul language. I could negotiate in a very limited way with this office and had to pay a lumpsum amount to close the card. I have also seen a guy who used to run a company to recover car loans. He used to get a phone call from the bank with the car details of customer having defaulted payment. This guy had a network of people all over the city. He used to trace the car in half an hour and forcefully take away the car from the customer and give it to the bank.

Benefits .. Claimed to offer v/s actually on offer !!
The sales pitch of this credit cards often used to be with lots of goodies. Most common is personal insurance, accident benefits, travel coupons, discounts, free upgrade to business class with Sahara Airlines or Jet Airways & most recent was 10% money back. Lucky enough, I never used the insurance facility provided by the credit cards. Travel coupons used to have fine prints. Discount used to be on brands that I never dreamt of buying in India. Free upgrade to business class I somehow couldnt use. 10% cash back with participating stores and with special clauses like need to spend minimum 1500 Rs a day in the same store etc. Vitually may be 10% times I could enjoy the offers. 90% times I used to enjoy the colorful brochures they used to send with my credit card statement.

Lost your credit cards?
Just a week before I was flying to USA... I was doing a lots of shopping. On a fine evening we friends had a dinner and came home. On our way back I bought a bottle of Pepsi and unfortunately dropped my wallet there. I had all my credit cards in there. I realised as soon as I reached home. I immediately called the hotel where we had dinner. Fortunately enough, just 2 days back, I had written all the credit card numbers, expiry dates, address & information like that in my diary alongwith the customer care numbers. Within 30 mins I called up all the card companies and got the cards blocked. Within 1 hour, one of my friend called saying someone found my wallet. I went to pick it up.. it was a group of bachelor. Later I came to know they tried using my card but they couldnt since I blocked all of them. But after blocking all the cards, it was quite tough time for me thereafter. Luckily I had a debit card in my pant pocket while I lost my wallet.

So Credit cards was a wholesome experience for me. Tomorrow Let me share my experience about cards in USA. So do visit this place again.

- Mumbaikar