The Credit Card Myth

What I see today is that a 3” x 2” piece of plastic has emerged as this new age tool of multi usability; it offers rewarding privileges to some, enables access to high-end venues, for yet others it could be a convenience. But there is no doubt that most importantly it is a status symbol.

The credit card has changed the way of using money, but what has happened to its basic motive of invention, of making life easy and facilitating transactions? Without the slightest of doubt one can enlist the numerous ways in which this card has proven to be boon. What I want to stress here is not only how people sink into the heavy loan amounts or how the problems of not being able to pay the complete amount on time occur, these are the card-holders personal issues, which the card users are singularly responsible for.

The real problem related to credit cards is from the side of the banks. By virtue of its responsibilities the Reserve Bank has released certain measures and orders, which will surely be welcomed by customers. For instance, the rampant levels of interest should be brought down, if due to deflation or any other reason interest is charged at a higher rate, then it should be clearly stated in the disclaimers and a transparency in the system is a must. The card should be issued only when the customer demands it. If misinformation leads to any loss to the customers, it should be incurred by the bank. Clear reasons will have to be stated to a prospective customer in case he is denied being issued a card. Well structured mechanisms need to be developed to deal with complicated issues, for instance a scenario where customer grievances are left unanswered should not occur. The customers will definitely experience a sense of respite once these guidelines are implemented.

Further, there are still certain issues, which remain unaddressed; when at times even upon the reception of bills – payments are not registered, when the customers surrenders his card, he is still bombarded with bills, and even after settlement the customer name reaches the credit bureau because of which the possibilities of getting further loans diminishes. These might be a few of the problems faced by the customers but at the same time it can be seen in another light, that it is this carefree and extravagant lifestyle that the people crave for which leads to them becoming lax, the credit card today has become the license to splurge.

Awareness in our country is not increasing at the same pace at which the widespread use of credit cards is. It is mandatory that people understand and learn the proper usage of this multifunctional card. The various attractive schemes about the rewards and benefits that the sales-person gives blinds the customers to the words of caution and disclaimers mentioned in fine print.

It should always be kept in mind that it has been man’s weakness to bend before comfort and luxury, but one should not become oblivious to the fact that money is always hard earned and should be used judiciously.

Aditya Sinha


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