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Old 12th October 2012, 18:52   #766
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Default Re: The Credit Card Thread

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Originally Posted by huntrz View Post
Alpha1, that's correct. That was what I meant by reducing loans. Interest is charged only on the outstanding principal for the day(Daily reducing) or the month(monthly reducing). That's the way it is supposed to be calculated always but it is doesn't always happen that way in practice.

Many NBFC and all credit card companies don't follow this method. They use the formula (Principal+SimpleInterest for the tenure)/tenure
Check this-
http://www.sbicard.com/services_for_..._0_011818.html

They clearly mention it is a flat interest rate of 14.5% on entire amount. This should be equivalent to about 27%(approx) interest if it is calculated the way banks do.
The initial EMIs are against the Interest component entirely. Once entire interest has been realized then the principal repayment starts. That's how they calculate outstanding principal for foreclosure. Totally skewed against the customer!!!


I don't know about all the NBFCs but a guy from a renowned NBFC was offering me SimpleInterest(Flat interest) loan in probiking showroom saying that this the way it goes for bike loans etc.

So everyone, please keep your eyes open when taking any kind of loan.
Then there should be a PIL to stop this misleading by the banks!!!
Or they should at least mention the actual interest rate being charged during the EMI.

Hope there is no such "scam" happening in the Home loan market.

Quote:
Originally Posted by supremeBaleno View Post
Isn't short/long term debt/liability relative and dependent on one's financial ability ? I can understand a car needing to be bought on finance, but is a bike something you would call a long term obligation (or want as one) ? Unless it is an R1 that I am buying. If not for the credit-card, I would pay the full amount by cheque, instead of doing documentation for loan, paying interest, removing hypothecation etc. I am talking as an individual, not as a business, where they might do it differently.
P.S.: I mentioned about avoiding the CC trap called "revolving card balance" - did not say that I revolve money.
Of course,if you have cash reserve with you, but you need to be careful that such purchases don't become impulsive! Because pushing the actual incurred expenses to the next month can very well become a habit. Besides, if you have all the cash - why not pay it upfront?

Even in the lowest of the lowest loan schemes / credit card schemes - you will have something extra to pay (like service charge etc); otherwise all banks will close down - so why pay extra?
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Old 12th October 2012, 20:20   #767
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Default Re: The Credit Card Thread

Quote:
Originally Posted by alpha1
Besides, if you have all the cash - why not pay it upfront?
Because I find CC a very convenient mode of payment. Also I anyway have to do an NEFT transfer every month to pay the bill for other purchases incurred during the month on the card. So even if there is a big-ticket item on the list for an odd month, it is all covered in that single transfer.

Quote:
Originally Posted by alpha1
Even in the lowest of the lowest loan schemes / credit card schemes - you will have something extra to pay (like service charge etc); otherwise all banks will close down - so why pay extra?
That's what my Dad (a staunch credit-card opposer - have got him an add-on card but he has never used it) also says. As per him "there is no free lunch", so there should be a catch somewhere in this whole credit-card business and thus he keeps away. But if the card is free (no joining fee, no annual fee) and purchases are done only if there is no surcharge levied and you pay the full bill amount every month without interest, there is no catch I see.

But then like you asked, how do banks make a living ? Because quite a lot of cardholders rollover their monthly bill, ending up paying close to 36% p.a. interest on the balance. If they had taken the trouble to read the fine-print that came with their card, they would have seen that interest charged is 2.8% or so p.m. (when mentioned in p.m. it seems low). And they would also know that once you start rolling over your due, not only is the balance attracting interest, but any further purchases you do from then on will also attract interest from date of purchase. Basically this means that the 30-45 day no-interest period you normally get on your monthly billing is no longer available.

Last edited by supremeBaleno : 12th October 2012 at 20:26.
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Old 12th October 2012, 20:28   #768
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Quote:
Originally Posted by supremeBaleno View Post
That's what my Dad (a staunch credit-card opposer - have got him an add-on card but he has never used it) also says. As per him "there is no free lunch", so there should be a catch somewhere in this whole credit-card business and thus he keeps away. But if the card is free (no joining fee, no annual fee) and purchases are done only if there is no surcharge levied and you pay the full bill amount every month without interest, there is no catch I see.
Don't forget that

Bank chargers all the merchants 1.8% to 2.5% service charge on every transaction done on the PDC swiping machines. So more you swipe bank makes more money from the merchants. Hence they offer you free cards with no fees and encourage you to spend.

Quote:
Originally Posted by racingmachine View Post
Is it wise to swipe the credit card for purchasing a new two wheeler?

I have a HDFC credit card with 1 lac limit which i want to swipe for full amount for purchase of new bike. Do they easily convert it into EMI's(12 months, 18 months, etc)? or is it a risk-they may or maynot convert the amount into EMI's?

I want to avoid 2 wheeler loan because I do not want the hassles of hypothecation. Another option is going for a personal loan for 1 lac & repayment in 12-18 months. What would you guys suggest?
I would rather suggest you this CC method if you want to avoid HP on the bike and please avoid taking personal loans for purchasing a bike.

As you have a HDFC Card, there is a option for you called Dail An EMI which can accessed online from your netbanking account. Its easy and convenient to convert the purchase to EMI.

Infact I had swiped 2.8 Lakhs from my HDFC Card for my BIL car purchase few months back and converted it to EMI. They charged me actual 1.8% extra at showroom by showroom people and 1% service charges for Dail An EMI offer by HDFC Bank.

I also get rewards points for every EMI

I found one article about this - http://www.cardbhai.com/2012/05/hdfc...is-online.html

Last edited by mobike008 : 15th October 2012 at 13:11. Reason: Back to back posts. Please refrain !!!
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Old 12th October 2012, 22:25   #769
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Default Re: The Credit Card Thread

Quote:
Originally Posted by CRV2010 View Post
I would rather suggest you this CC method if you want to avoid HP on the bike and please avoid taking personal loans for purchasing a bike.

As you have a HDFC Card, there is a option for you called Dail An EMI which can accessed online from your netbanking account. Its easy and convenient to convert the purchase to EMI.

Infact I had swiped 2.8 Lakhs from my HDFC Card for my BIL car purchase few months back and converted it to EMI. They charged me actual 1.8% extra at showroom by showroom people and 1% service charges for Dail An EMI offer by HDFC Bank.

I also get rewards points for every EMI

I found one article about this - http://www.cardbhai.com/2012/05/hdfc...is-online.html
Hi. Thanks for the reply & the link. It was an interesting read.

Can you please elaborate as to why should i avoid taking personal loan for purchase of a bike?

I believe bike loan, PL, or swipe by CC should cost me more or less same at the end of the day (including transaction/processing fees, interest, etall). Yes, the interest for Dial an EMI may be slightly less, but that cannot be confirmed as it is on a case to case basis.

I generally keep my credits in check, pay my CC bills way before time, and am comfortable paying by EMI's. In this case i am getting inclined a bit towards the PL, considering i get a good deal. Otherwise, the CC option is always open.
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Old 15th October 2012, 12:29   #770
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Default Re: The Credit Card Thread

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Originally Posted by supremeBaleno View Post
Because I find CC a very convenient mode of payment. Also I anyway have to do an NEFT transfer every month to pay the bill for other purchases incurred during the month on the card. So even if there is a big-ticket item on the list for an odd month, it is all covered in that single transfer.
I also use credit card regularly and perhaps more than any other mode.
But my expenses on credit card + others are limited to the comfortable expenditure threshold.

If its a bike I have to buy, I will wait for the next month to accumulate that money. You never know when the real emergency strikes and money is required (especially medical emergencies, accidents) - if the credit card in already low on balance, and cash is also running low in the bank - we are in a soup.
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Old 15th October 2012, 13:05   #771
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Default Re: The Credit Card Thread

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Originally Posted by CRV2010 View Post
They charged me actual 1.8% extra at showroom by showroom people and 1% service charges for Dail An EMI offer by HDFC Bank.
Interest at 1.8% per month works out to 21.65% per annum which is quite a high interest rate. Vehicle or personal loans would be much cheaper.
Quote:
Originally Posted by supremeBaleno View Post
But if the card is free (no joining fee, no annual fee) and purchases are done only if there is no surcharge levied and you pay the full bill amount every month without interest, there is no catch I see.
once you start rolling over your due, not only is the balance attracting interest, but any further purchases you do from then on will also attract interest from date of purchase. Basically this means that the 30-45 day no-interest period you normally get on your monthly billing is no longer available.
I also find credit card a more convenient mode of effecting payment and if the repayment by transfer or cheque drop is done promptly there is no harm at all, provided card came to you without membership, yearly or any other hidden charge.

Last edited by rajeev k : 15th October 2012 at 13:25.
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Old 15th October 2012, 13:20   #772
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Default Re: The Credit Card Thread

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Originally Posted by rajeev k View Post
Interest at 1.85 per month works out to 21.65% per annum which is quite a high interest rate. Vehicle or personal loans would be much cheaper.
I am paying 11.88% /yr interest rate on Dail An EMI from HDFC.

1% was one time processing fee for the loan.
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Old 27th October 2012, 10:39   #773
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Default Help with Indus-Ind Credit Card

Hello all,

I have this Indus Ind card which I cannot use; I am saying I cannot use, not because I don't use credit cards but because of extremely low limit that they have set (INR, 10,000).

This was once a DB card with good credit limit and due to the sub-prime crisis and collapse of many large banks, my limit was restricted to 10K a month (subject to availability of funds). I was okay with this back in 2008 since I was working with a financial research company and quite understood the logic of the banks. They mentioned that they review the usage regularly and would revise the limits if they feel it is appropriate to do so at a later stage.

It's been 4 years now, DB has sold it's assets and liabilities to IndusInd bank who have now issued a new card (basically with their logo and nothing else has changed). If I call up their customer care, their wait time varies between 15-25 mins before someone picks up (so far, no one has picked up my call). So, I walked into the nearest IndusInd Bank for cancellation of the card. My logic - No point in keeping it, when I am not going to be using it; I am happy with my HSBC/SBI/HDFC and other cards with sizeble credit limits. Now, the lady there tell me that I have to place a request through the call centre! Upon telling her the wait issues and stuff, I was given a blank paper to write an application for the cancellation of the card; I did so and submitted it to her. I was informed that someone from their call centre will call me in the later half of the day or next day. However, it's been a week now and no one has bothered to call me.

What should I do next? I just simply don't want to cut the card and throw away but close it properly. There are no outstandings but I don't want to pay INR 750 (or whatever would be the annual fees) at the end of the year because I didnt use the card for a minimum of XXX amount which they may ask for. Reason I am not using the card because of "bank's issue" and not mine; I am also not able to cancel it because of "bank's lethargy" and irresponsive behaviour.

Please advise?

Last edited by amtak : 27th October 2012 at 10:42.
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Old 27th October 2012, 10:57   #774
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Default Re: The Credit Card Thread

Amtak, I would rather suggest you to call their call center again and place a cancellation request, take the service request for the cancellation and ask them to send you the soft copy of No Due Certificate to your email.

I had once done like this for my kotak card and it was a hell like experience for me. I submitted my CC Cancellation request to the service manager in the bank in written and it was cancelled too but It was never updated their system and in the CIBIL and still not.
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Old 27th October 2012, 11:10   #775
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Default Re: The Credit Card Thread

^^CRV2010, I shall try again. Honestly, if CIBIL wasn't in place, I would not have bothered trying to close the CC properly and would have just cut it and thrown away. Thankfully, because of CIBIL, we are a bit process orientated wherein for the guys for whom CIBIL is, aren't!
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Old 27th October 2012, 14:44   #776
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Default Re: The Credit Card Thread

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Originally Posted by amtak View Post
^^CRV2010, I shall try again. Honestly, if CIBIL wasn't in place, I would not have bothered trying to close the CC properly and would have just cut it and thrown away. Thankfully, because of CIBIL, we are a bit process orientated wherein for the guys for whom CIBIL is, aren't!
This will help you peace of mind. Later on I struggled a lot to get the things proper after the help of Kotak Cards Nodal Officer and CIBIL Dispute. Still recently Kotak rejected my Card Application (They said Pre-Approved while getting the documents signed) saying I already have one from Kotak!!

Last edited by CRV2010 : 27th October 2012 at 14:45.
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Old 28th October 2012, 11:56   #777
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Default Re: Help with Indus-Ind Credit Card

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Originally Posted by amtak View Post
What should I do next? I just simply don't want to cut the card and throw away but close it properly.

Please advise?
You should not cut the card and throw it away.

Cut the card, write an application in plain paper that you are no more interested in keeping the card and send it to the customer care post box mail address and you are sure to receive a call after they receive the mail. They might even offer you to give the card free of cost for couple of years and if you agree they would send you a new card free of cost, this has worked with me couple of times, this would also happen only if your credit history is impeccable.

P.S. Dont forget to cut the card through the magnetic line or through the chip if the card is chip enabled.

Last edited by rajeshchand : 28th October 2012 at 11:59.
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Old 28th October 2012, 13:24   #778
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Default Re: Help with Indus-Ind Credit Card

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Originally Posted by amtak View Post
Please advise?
Why dont you try writing an email through your login , if available.

They will call you back.

Alternately, try calling customer care on Sunday early in the morning, 5 am types, they arent that busy during that time.
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Old 29th October 2012, 12:47   #779
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Default Re: The Credit Card Thread

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Originally Posted by rajeshchand View Post
You should not cut the card and throw it away.

Cut the card, write an application in plain paper that you are no more interested in keeping the card and send it to the customer care post box mail address and you are sure to receive a call after they receive the mail. They might even offer you to give the card free of cost for couple of years and if you agree they would send you a new card free of cost, this has worked with me couple of times, this would also happen only if your credit history is impeccable.

P.S. Dont forget to cut the card through the magnetic line or through the chip if the card is chip enabled.
I was planning to do that. However, this would be the last resort. Hence, I first wrote a letter to them and submitted it in their branch!

Quote:
Originally Posted by tanwaramit View Post
Why dont you try writing an email through your login , if available.

They will call you back.

Alternately, try calling customer care on Sunday early in the morning, 5 am types, they arent that busy during that time.
Tried all; hence went to the branch. I am planning to visit the branch again tomorrow (not carrying the card today) and ask them for an update. If not, I shall make an access payment of Rs. 1 in CC account so that they have to send me monthly statement!

Quote:
Originally Posted by CRV2010 View Post
This will help you peace of mind. Later on I struggled a lot to get the things proper after the help of Kotak Cards Nodal Officer and CIBIL Dispute. Still recently Kotak rejected my Card Application (They said Pre-Approved while getting the documents signed) saying I already have one from Kotak!!
How about writing to Sh. Uday Kotak?
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Old 29th October 2012, 12:53   #780
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Default Re: The Credit Card Thread

I received a call from a person claiming to be with HDFC bank, he said they have received my credit card cancellation request & a new card has been dispatched.
Since I had not cancelled my card I asked him the number which he refused to give. Instead he very cleverly asked me to cite my credit card number so he could confirm the cancellation.
I immediately hung up & informed the HDFC credit card division before making sure there were no unauthorized transactions.
This seems like a new string of fraudulent attempt to control someone else's credit card. Do not divulge any personal or your credit card information to anyone.
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