Dhadkan of India

This is the second post in series of Indian Credit Cards You can read the first post about types of Credit Cards Indian Companies offer to know what options you have.

These credit cards operate based on principle known as “buy now, pay later.” Credit cards are quite useful and come with a host of advantages such as being able to buy expensive items and paying for them over a certain period of time at a limited rate or none at all. Another advantage to using credit cards is you can use it almost anywhere, and you can also withdraw cash from ATMs that accept your credit card in case you run out of cash.

Now days getting a Credit card in India is very easy but maintaining them is little difficult. The moment you forgot to pay dues, Indian banks will put high interest rates on you as surcharge. Some of the more frequent problems people face in India with there credit cards are -

* Monthly Charge - Some credit cards add monthly interest charges which can ultimately mean that you pay more for the goods or service you charged as compared to if you had paid for it with cash.

* High interest rates - You may be charged with more than 30 percent in interest without you knowing it. The interest rates may even reach up to 50 percent for different cards.

* Steep late charges - Missing a payment or paying late also comes with financial charges. You may be charged up to 20 percent for paying past your due date.

* Control youself and only use it when you need it - You can get into the habit of using your credit card too often. This, added with the use of multiple credit cards with large credit limits, young and inexperienced people will get into trouble by extending their income through their credit cards and ending up being unable or struggling to pay.

* Credit Cards Scams - You can get scammed and swindled by dishonest individuals. Some people do dirty business over the phone, pretending to be a representative of the bank to get your credit card information.

* Counterfeit Credit Cards - Some problems with credit cards are products of technology also. Skimming, cloning and counterfeiting of credit cards have increased in the past years. Although you do get protection from the Bank in such cases but this is very tricky, painful and time consuming.

* Fraudulent Purchases - Mistakes happen, and you may be charged with purchases you did not make. Some fraudulent purchases may also be charged to your account. If such thing happens than immediately talk to your bank and take appropriate action.

* Low introductory rates on purchasing plans may be very attractive, but they can also mean trouble in the long run. Most of these low rates only last for a limited period of time and will automatically revert to the older and much higher rate without you being notified. Make sure you ask the bank to clarify such things.

* Overcharging can also happen - So make sure to keep all your receipts and check your monthly statements to make sure you aren’t charged excessively. This overcharging can happen anywhere, by mistake or by deliberately. By keeping all the records and slips, you will always have the proof to get the money back.

* Bad credit - You may end up with bad credit if you miss a card payment. This usually comes into play and spells trouble in case you decide to apply for a loan or for another credit card. Financial companies may label you as a bad credit risk and may then reject your application or require you to pay more interest on the loan you want to get.

Most of these things are related to each other. The only advice that I can give you is to use your Credit Card carefully and only use it when it is required, otherwise use cash. Keep record of all your bills and if you find any surcharge by bank, even if it is of Rs 100,  immediately asked them why this has been put ?

Hope you find this article helpful and informative. If I missed something or you want to share your experience than please put it as comments below.