A la card | india | Hindustan Times
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A la card

The youth segment speaks up on the snafus of owning credit cards.. Sneha Mahale listens in.

india Updated: Jan 21, 2009 19:11 IST

India is the second fastest growing market for financial cards in the Asia-Pacific region, says a report by the Euromonitor International. India’s credit card base, pegged at 27 million in 2007, is growing at an annual rate of 30-35 per cent. A significant percentage of the users comprises the youth segment.

Getting a credit card is easy due to youth friendly banks schemes. The other side of the coin is that splurging on unnecessary luxuries is becoming uncontrollable. Plus, the rising liquidity crisis in the financial sector has led to a rise in credit card spends.

Abhishek Bhatia, 24, owns two credit cards, one from ICICI and the other from American Express. Bhatia keeps Rs 5000-6000 in one card and uses it only for swiping. So when money is low on one card, he transfersome from the other account. In the last three years, there has been a considerable increase in the number of youths owning credit cards. However, the interest rate on credit cards has gone up significantly over the past six months. Plus, the monthly interest rates on the outstanding ranges is also up.

Srishti Aggarwal, 22, MBA student, uses her credit card only at restaurants and for online tickets when she travels. Otherwise, she prefers to pay in cash and avoid any chances of being charged more for late payments.

Turn off
Abhijit Kamble, 22, HR employee, swore off credit cards after a bad experience. He had around five to six of them. The due date for paying his credit card bill was the third of every month. According to Kamble’s bank statement, his cheque had been cleared on the second last month but he was charged Rs350 over the amount due (Rs 300) as late fee.
He narrates, “I tried to clear the matter with the bank but was told to ring up a call centre..they refused to do anything because they said they lacked any authority to intervene. Now, I plan on discontinuing my cards.” Recovery agents, though now banned by law, are a cause for concern as well.

Matter of choice
Sachin Patil, who handles credit card operations in a bank, says, “Choose a card according to your needs. There are cards for the youth that cater to their needs and give discounts on petrol and shopping.” It is widely felt that in the case of credit cards, interest rate compounds and even if the bill doesn’t reach you at the end of the month you are liable to pay the money due or are charged late fees. So, keep this in mind while opting for that perfect card.