Protect yourself: Don’t let your credit card issuers take you for a ride

How often we come away annoyed and frustrated about some charges in our credit card statement that have been added for a service you did not ask for nor availed. But being alert and assertive on our rights we can avoid being taken for a ride and take control of our finances.

Rajiv Raj

Let’s face it, banks and financial institutions are in the business of making money and they set targets for their employees and agents. Often to reach these targets the sales personal play around with the truth and convince customers to buy a new product or avail a premium service. While it not ethical, it is the reality faced by customers on a daily basis.

This real life case of Maitali Sharma (name changed), a senior citizen, who had been harassment over recovery of credit card dues which were settled in 2007.  The bank nonetheless passed his case to a recovery agent, the recovery agency had issued a legal notice for recovery of dues in 2011 and the agency was pressing for payment stating that the past settlement was no longer valid. Luckily, Sharma had retained the original settlement paperwork and he could refute the claim with the banking ombudsman and get the recovery agents to leave him alone.

Credit card related complaints are one of the highest that are handled by the banking ombudsman. Around 21% of all banking related complaints are due to credit cards. Let’s understand how we can avoid getting rip-off on our credit cards


Just say No

If the bank is offering an upgraded service or enhanced credit limit be firm about refusing it if you do not have any use for it. Even a so called “free” benefit often has hidden costs to it.  For instance, often banks call up to offer a “free” add on credit card. Here often the first year’s annual charges are waivered but often annual fees are added on from the next year.

Check before writing the check

Keep receipt of all your spending of the month and check them against your credit card statement to ensure that there have not been any additional charges on your card. So before blindly paying your bill do scrutinise your statement.

Read all correspondence from your bank

Often important correspondence like changes in your credit card charges or change in your billing cycle will come as a casual additional page announcement with your credit card statement. An increase in charges could mean a heftier outflow of your income. In case of change of billing cycle you might continue to pay bills on the original due date which may result in late charge.

Read the fine print

Banks often offer service like “free accident insurance” or a “premium circle membership” etc. While these offers look attractively priced they might not be the best for you. For instance a “premium circle membership’ might give you invites to two cultural events in a year but these might be events in cities like Mumbai and Delhi, if you are located in Nasik, this particular facility might be useless to you.

Fight for your rights

The RBI states that in the case of any banking-related complaint, the customer has to first try to get a solution from the bank. He can file a complaint before the Banking Ombudsman if a reply is not received from the bank within one month of the bank receiving his complaint. He can also move the Banking Ombudsman if the bank rejects the complaint or if he is not satisfied with the reply given to him by the bank. 

If you feel that you have been billed wrongly or have been misrepresented about some service, do not hesitate to raise your voice against it and fight back.

The author is Co-Founder & Director, CreditVidya

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