The world of finance is a rather intriguing one. It is all the more so when it comes to the business of finance which is most of the times never understood by the Common man.
More often than not while there are exceptions, the business of finance gloablly is smitten with fraud or by fradulent operators. Surprisingly this includes some very big and honourable names too. Fraud that cannot be seen by the common eye of the consumer. It requires the eye of a specialist, nay that of a Sherlock Holmes for the world of finance, to detect a fraud or any irregularity.One reason for this could be that in the industry of finance, the input is finance, the output or the end process is finance and the ensuing process is also all about finance.
And the business of credit cards is just the tip of the iceberg in this world of (read it as business of )finance. But it is good and sufficient in itself to assume significant proportions so as to cause a major concern for the credit card customers.
Most of the prospective users of credit cards have or would have been shown the dream of easy and abundant finance being made available to them. Till they actually experience it. Everything looks like being in in the land of milk and honey and it would seem as though nothing would go wrong.
Especially so because the customers are told that they have been explained all the terms of the usage. The customers would get a cycle of credit and they should pay up whatever they have used within the payment cycle to avoid any interest charges. It is so simple. Or they are made to feel so.
On majority of the occasions it starts with a small but simple complaint by the customer wherein he/she has dropped the cheque in the collection box but that it was not cashed and hence there is a late payment charge in the statement of the credit card. The call center agents listen to very graciously and with utmost courtesy and concern. But then nothing is usually done nothing about it.
There is a disagreement on whether the late payment charges have to be paid or be waived off. On the first two occasions they do indeed get waived odd . Slowly the number of statements in which the late payment charges are levied with interest charges increase. The tone is no more cordial and starts being argumentative.
As the customers resist this the relationship starts to sour slowly as the customers mostly refuse to pay the unreasonably high and needlessly levied late payment charges.There have been innumerous occasions when this late payment charges coupled with interest charges have turned the outstandings into mountains of debt and the customers end up settling the dues in orders to get rid of the debt and the credit card too. But also on most occasions the damage by this time would have been inflicted on their credit rating.
One thing that many a customer could not comprehend even after years of pondering is this: A credit card company charges offers a defined credit period for the consumer to use the finances. Beyond this credit period they start levying a defined rate of interest. Usually this rate of interest is much higher than any other rate of interest which is close to 3% per month or sometimes even higher. That is an astounding 36% per annum compared to any other loan from a bank which is about 15% pa-18% pa. The question is this. Why do they need to levy a late payment charge when there is already a hefty interest charge of 36% pa.
For years there has been no solution to this problem and customers either have been unwillingly paying these charges. But very rencetly in a move that would definitely bring relief to most of the credit card customers RBI has asked the banks to delay the imposition of the late payment fees by one cycle. What it means is this.
Prior to this, even if the customers are delayed in paying their dues by even a day or two, the banks were levying a late payment charges ranging anywhere between Rs. 100/ to Rs.700/-. Such amount would be levied for every delay in a payment cycle.
Now for any regular customer if the payment is delayed due to any reason such as a busy schedule or a travel even on a single instance it means doling out the above charges as demanded by the bank or face the risk of paying the same with higher interest charges too coupled with this as explained earlier.
Enclosed is an article courtesy The Times of India dated 14th June the content of which would spell music to the ears of credit card customers and users.RBI has told the banks that they can charge the late payment fees only in the next payment cycle following a missed payment.
Customerawaaz appreciates this move of RBI as this directive comes as a relief for more of the Indian customers whose cause is being supported by us. Come join us in congratualting RBI for such a good move and enjoy which helps us customers to enjoy our respective credit card services better and wisely more so.