Credit cards: 'A beautiful tool to manage cash if used judiciously'

We asked Get Ahead readers to send in their opinions on the credit card vs debit card debate. Here's their take on the advantages and disadvantages of credit and debit cards and the problems they faced after using their credit cards :

I am planning to approach the Banking Ombudsman

Credit cards are indeed sugar-coated poison.

I would like to share a horrifying experience that I had.

I use ABN AMRO Bank credit card since last 4 and a half years.

Off late I had a lot of problems related to billing, but which was sorted out.

But, just recently, I had a problem that one can never expect.

I got an SMS from ABN AMRO saying that the loan that I had applied for has been approved and processed and the Draft has already been dispatched to me.

I was shocked as I had never applied for any loan.

I immediately called up the Help Line number and spoke to a 'Customer Service Executive' named Prince.

He told me that it was a pre-approved loan and he will get it cancelled since I have not applied for it.

But still I received the draft. I immediately sent a mail and got a reply asking me to visit any one of the ABN AMRO branches and surrender the draft or drop it at any of the ATMs.

I sent back a reply saying that I cannot spare time to go the bank as it wasn't my fault. The branch closest for me is the Juhu branch and I stay at Borivali.

They were also not ready to give me an acknowledgment saying that I have surrendered the Draft.

The draft is still there with me. 

I am currently out of India. I am planning to approach the Banking Ombudsman as soon as I come back to India.

                                                                                                                                               -- Santosh Naganathan

A thief who breaks into your house at least steals honestly

I would like to share a bad experience with credit card.

After pressure from an agent, I agreed to take the 'Free' HDFC Bank credit card. To activate the card, I made a purchase of around Rs 900 and the next day put a cheque in their drop box. Please note that the cheque was drawn on HDFC Bank (the card issuer).

I am on tour a lot, and forgot about the matter because I thought I had repaid them the next day.

Nothing happened for 3 months. Then I received a statement from the credit card division. To my original purchase, had been added all kinds of charges (late charge, finance charge, interest, etc).

When I contacted them, they told me that my cheque had bounced because the date was written wrongly.

Assuming they were right, the question arises as to why neither HDFC Bank nor HDFC Bank credit card division inform me for 3 months that the cheque had not cleared.

When I argued about this, they admitted their mistake and agreed to reverse their charges.

Next statement after 2 months showed that the charges had not been reversed. With all the new charges, I now owed them more than double of what I had purchased.

Calling their call centres, sending them mails was no help.

I should not have paid, but I don't have the time to waste on such a minor amount. So for peace of mind, I paid up full and returned the card.

A thief who breaks into your house at least steals honestly. What do you call this kind of stealing by respectable companies?

                                                                                                                                                      -- Amal Deobhakta

Credit cards make us a debtor for the lifetime

Actually we have painful memories with credit cards. We have borrowed Rs 52,000 from ICICI card and paid the dues promptly. We have shifted our residence and we have intimated that to the concern authorities. We didn't get the monthly statement since we didn't borrow anything we paid the same amount, which we paid in the earlier month.

I believe that we have almost paid Rs 40,000 in respect of interest. We thought of going for a settlement and when we visited the nearby bank branch they asked us to write a letter to the head office. We have written 5 letters to the concerned office. Still we are waiting for the reply. As far as credit card is concerned, it will make us as a debtor for the lifetime.

                                                                                                                                                         -- G Rajalakshmi

Credit cards: A beautiful tool to manage cash if used judiciously

It is wrong to compare Credit and Debit cards, as they are two different products altogether.

Debit Card is a substitute for money as your account is instantaneously debited. Hence it is as good as paying hot cash. Only advantage is you need not carry the currency notes, so from a safety perspective it is good. Credit card is a beautiful tool that offers you a credit period of 40 - 50 days if used judiciously.

Depending on the magnitude of usage you can wisely plan your cash flows. Also there is definite interest cost savings for the credit period availed and provided the bills are paid on time. Reward points are marketing gimmicks and do not play a role in deciding the usage. I would any day go in for a credit card to manage my cash flows.

                                                                                                                                               -- Vikram Ranganathan

Also read:

'Credit cards are sugar-coated posion'

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