Monday, February 2, 2009

Before applying for Credit Card

Before applying for Credit Card
It is better to stay away from credit cards. But if you are in urgent need of credit card, then the following points might be useful to you. If you effectively use your credit card then you can be safe from debt trap and make good use of the reward points.
Read the application form clearly before signing :
Mostly banks engage third party people to get your application forms filled and signed by you. In a hurry the agent will show you few places where you have to sign, and you blindly sign. Remember some banks without your notice put you into their insurance scheme, where a fixed amount will be charged in your statement. Only after getting the first statement you will see the charge. Then if you call them and ask for cancelling the insurance scheme, then a cancellation charge will be levied including the first instalment charge which is already billed.
Add on Card - Free ?
Another thing to note is add on card, banks will issue you an add on card that you can get in the name of your parents or your spouse. Ofcourse this is free, but I heard that when my friend went and cancelled the HSBC add on card that he got in his mother's name, he was charged an annual fees saying only during the first year the add on card is free. So if you really don't need of add on card, just close it, or if it is sent to you by your bank without you asking for, then you can just return it.
Selecting statement date :
Some banks give you the option to choose the statement date for your card. If you are salaried person, then you can make use of it. Keep your statement date such that the due date for payment comes between 5th to 10th of every month. So as soon as you get your salary first you can settle of this debt. I have some of my friends who worry about their due date after 25th, by the time their account is almost empty.
Check the statement clearly :
Check the statement as soon as you receive. If there is any amount billed which was not used by you, then report it immediately. Last month when I receive my Citibank credit card statement, I saw a transaction was billed twice, the 'Reference No.', Date of transaction, Amount everything shows the same. I called them to report it and they asked me if I am sure I did the transaction only once, then they asked me to sent a form, which was available at their website for download, and courier it to them. Ohh, for their mistake I don't know why I have to do all these. And also they said they will resolve this in 45 days (that is too big). If the transaction is right, unlike what I complained, then they will charge another 100 Rs.
Complaints ? Whom do you contact ?
If you have some complaints, then first approach the bank, if you didnot get reply from the bank within one month then you may contact the banking ombudsman. You may also contact banking ombudsman, if the bank rejects the complaint or if the reply given by the bank is not satisfactory. A complainant can file a complaint with the Banking Ombudsman simply by writing on a plain paper. He can also file it online at or by sending an email at to the Banking Ombudsman. There is also a prescribed form for filing a complaint, which is available with all the branches of the banks. However, it is not necessary to use this format. The complainant should, however, incorporate all the required information. For more details log into Reserve bank of India website at
What primary use is it for ?
Before zeroing in on a credit card, make sure for what purpose you mostly use your credit card like shopping, filling up your fuel tank, book airline tickets etc.
I will give two examples of Citibank cards. In no way I am recommending this is good, but its features here.
If primary use of credit card is for shopping :
Citibank Cash back gold card is like you get minimum 1 rupee cash back for every 200 rupees spent. You can redeem it once you accumulate 500 rupees. This cannot be redeemed as cash in hand, but against the outstanding bill amount. If you rarely purchase fuel, then this card is good for you.
If primary use of credit card is for filling up of tank :
If you use your Citibank credit card mainly for purchasing fuel from IndianOil then you can opt for Citibank Indianoil card, here you get 4 turbo points on every 150 rupees spent on IndianOil outlets and 1 Turbo Point for every Rs. 150/- spent on non-fuel purchases. These points can be redeemed at select IOC outlets for free fuel and other IndianOil products once you accumulate 500 points. You will receive coupons for the amount which is equal to the number of points, by which you can only buy IndianOil fuel products from some of the IndianOil outlets.
All the best..If you had any good or bad experience of Credit Cards, then please say it in

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Disclaimer: All the information given in this blog is only my ideas and knowledge what I got from internet or other sources. For any interest rate, charges etc check the particular service as the charge might have changed. Regarding the intraday trading tips, this is applicable for that day only and also shouldn't be taken as advice. All the actions taken by you is responsible by you only. Thanks.

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