Day before yesterday I received this message from one of the leading foreign bank majors present in India. I had used their card for more than a year. In the month of May, some scrupulous and duping amount of Rs. 1200 was charged extra to my account, which I declined to pay. Before proceeding further, read their message below:
Fearing CIBIL should I pay the amount or not?
First look at why the amount has been charged?
Firstly the amount was charged for late payment of my Bill, which I always pay on time or a day or two prior to that. The due date of the ABC Card is 23rd of every month and I make it a point to drop the cheque on 22nd or 23rd of every month for the amount due. Generally I make the payment in excess of my Credit Card amount, rounding it off to the nearest hundred.
Why do they put all such charges on your account without any fault of yours’?
Frankly speaking they have to, they don’t have any choice. It is like their bread and butter. It is the most essential part of their business model. The revenue part. Credit card companies are only spending there money on their customers. You can imagine the huge costs, the credit benefit, courier charges of bills and others, cheque processing, 24x7 call centre, tie-ups for promotions and others. It’s a costly affair and you don’t earn anything against it. The only way you can earn is when your customer defaults and they charge huge late payment charges with phenomenally high interest rates (normally 3% on monthly basis – annualized 36%).
In the month of April, I had dropped in the Cheque for the amount due on time. I was travelling so they requested me to arrange for the minimum amount of Rs. 150 by Cash to avoid late payment charges, as they found it difficult to trace my Cheque. Living with a friend in Mumbai, it was difficult to arrange for a person at my place to catch with up with the Bank person to collect Rs. 150. Knowing it was weekend and my flat-mate was also supposed to be travelling that day. But fortunately or unfortunately, his scheduled trip was delayed by a day. But then he was away arranging his tickets. Luckily we had one of the best landlord’s to be found in Mumbai, who was living in the same building, who paid the amount on my behalf.
Guess what? Next month, I am charged for the late fee with the interest and a service charge of Rs. 150 for Cash payment. Rs. 150 was the additional amount that I had paid over and above the amount due for the month of May. Look at their generosity; they settle this Rs. 150 towards all the bull-shit charges they have charged me with.
I wrote a mail telling them, I am not liable to pay all that stuff that you have charged me with. They always make a request to pay three days in advance to the due date. For orderly processing of the same by the due date, then why the hell the due date exists? They cannot bring down their due date down on paper due to regulations and the competition from their peers.
At times, this whole of theory and application of CAPITALISM sucks. I know we would have been worse off under Socialism.
I wrote abusing mails to them. I know most of the customers of any bank, store, mobile phone services behave as if they own those multi billion dollar company. But then that is how the dynamics of the market have emerged. I pity their employees, those guys are quite courageous to be working in such profile and an organization where everyday they encounter people who are yelling, screaming and abusing them. I would have definitely walked out from it the very next day. But then we do many things in our life, which we don’t like or don’t enjoy either.
Their modesty and patience level is appalling. They still write to me always in a humble and modest manner. Look at the following last week’s message:
I spoke to one of my friends working in the global bank (my credit card bank). He advised me to stay away from it. He said, “don’t worry, due to poor quality of service, they are planning to shut their Indian office and operations.” Its difficult to eliminate India for any MNC for its global operations. The other astonishing fact he quoted was,
The card you are holding belongs to some primitive scheme. Primitive means anything which is more than 12 months old. They have been instructed not to service the old scheme customers. Get them onto the new product then you may be able to get my share of due. This pace of dynamism in Capitalism is quite disturbing.
I just wish one change in their policy, you shut the doors on the customers you are not happy to serve.
At the end of all this, what should be my stand. I may looking for a car loan in few months and a home loan few years from now, what are the options that I have?
“Please pay at least the minimum amount due on ABC Card to avoid defaults. A poor CIBIL score can deny you credit cards and loans in future. Ignore if paid.”A poor CIBIL score. Does anyone understand what the hell is that? CIBIL stands for Credit Information Bureau (India) Limited. I belong to the investing and financing community, so I know what the hell is CIBIL. If your name features in CIBIL, you cannot take any loan from any bank, whatsoever. Although some NBFC may take upon the high risk of offering you a loan that too at a high interest.
Fearing CIBIL should I pay the amount or not?
First look at why the amount has been charged?
Firstly the amount was charged for late payment of my Bill, which I always pay on time or a day or two prior to that. The due date of the ABC Card is 23rd of every month and I make it a point to drop the cheque on 22nd or 23rd of every month for the amount due. Generally I make the payment in excess of my Credit Card amount, rounding it off to the nearest hundred.
Why do they put all such charges on your account without any fault of yours’?
Frankly speaking they have to, they don’t have any choice. It is like their bread and butter. It is the most essential part of their business model. The revenue part. Credit card companies are only spending there money on their customers. You can imagine the huge costs, the credit benefit, courier charges of bills and others, cheque processing, 24x7 call centre, tie-ups for promotions and others. It’s a costly affair and you don’t earn anything against it. The only way you can earn is when your customer defaults and they charge huge late payment charges with phenomenally high interest rates (normally 3% on monthly basis – annualized 36%).
In the month of April, I had dropped in the Cheque for the amount due on time. I was travelling so they requested me to arrange for the minimum amount of Rs. 150 by Cash to avoid late payment charges, as they found it difficult to trace my Cheque. Living with a friend in Mumbai, it was difficult to arrange for a person at my place to catch with up with the Bank person to collect Rs. 150. Knowing it was weekend and my flat-mate was also supposed to be travelling that day. But fortunately or unfortunately, his scheduled trip was delayed by a day. But then he was away arranging his tickets. Luckily we had one of the best landlord’s to be found in Mumbai, who was living in the same building, who paid the amount on my behalf.
Guess what? Next month, I am charged for the late fee with the interest and a service charge of Rs. 150 for Cash payment. Rs. 150 was the additional amount that I had paid over and above the amount due for the month of May. Look at their generosity; they settle this Rs. 150 towards all the bull-shit charges they have charged me with.
I wrote a mail telling them, I am not liable to pay all that stuff that you have charged me with. They always make a request to pay three days in advance to the due date. For orderly processing of the same by the due date, then why the hell the due date exists? They cannot bring down their due date down on paper due to regulations and the competition from their peers.
At times, this whole of theory and application of CAPITALISM sucks. I know we would have been worse off under Socialism.
I wrote abusing mails to them. I know most of the customers of any bank, store, mobile phone services behave as if they own those multi billion dollar company. But then that is how the dynamics of the market have emerged. I pity their employees, those guys are quite courageous to be working in such profile and an organization where everyday they encounter people who are yelling, screaming and abusing them. I would have definitely walked out from it the very next day. But then we do many things in our life, which we don’t like or don’t enjoy either.
Their modesty and patience level is appalling. They still write to me always in a humble and modest manner. Look at the following last week’s message:
“Dear customer, your ABC Card payment Rs. 240 is overdue. Pls pay immediately to avoid further service/finance charges. Call us on 022-________. Ignore if already paid.”But they never threaten to cancel my card. Like my mobile phone provider says in absence of payment, we may hold up your services. A credit card company will never say you, Sir I am blocking your card from making any further transactions. Such are the dynamics of the money lending business. They continue to service me like any regular customer. If you banish your customer in money lending business, you may not see him forever. You always need to maintain the relationship with them. You need to lend more to recover your previous defaults. I am not a defaulter here.
I spoke to one of my friends working in the global bank (my credit card bank). He advised me to stay away from it. He said, “don’t worry, due to poor quality of service, they are planning to shut their Indian office and operations.” Its difficult to eliminate India for any MNC for its global operations. The other astonishing fact he quoted was,
The card you are holding belongs to some primitive scheme. Primitive means anything which is more than 12 months old. They have been instructed not to service the old scheme customers. Get them onto the new product then you may be able to get my share of due. This pace of dynamism in Capitalism is quite disturbing.
I just wish one change in their policy, you shut the doors on the customers you are not happy to serve.
At the end of all this, what should be my stand. I may looking for a car loan in few months and a home loan few years from now, what are the options that I have?
I know one thing they are not going to block card. The matter will linger on like that for couple of coming months. They they are going to break in my door and ask for one time settlement, which will be compounding from the base of Rs. 1200 to say Rs. 3000, 4000 or 5000 depends on the time. Coz as I said, it’s the compounding effect.
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