We both earn and our collective take-home is Rs. 60, 000. We have credit card dues of Rs. 51, 000 and a personal loan with ICICI of about Rs. 2.93 lakh. There are no savings at the end of each month. We would like to close the debts and go in for housing loan to purchase a flat. Please advise as to how the debts can be repayed. Is it good to take on housing loan when we have credit card expenses, personal loan due and regular monthly expenses to take care of?

The Consumer Unity & Trust society (CUTS) has failed in convincing the Reserve Bank of India to pull down credit card interest rates.
(http://economictimes.indiatimes.com/ET_Debates/Cap_credit_card_interest_rates/articleshow/3473126.cms)

You would think that the CUTS would get some sense knocked into its stubborn head after repeated failures. After all, it has been at this for over five years. And even it they are fighting the good fight on our (the credit card consumers) behalf, the complaints are not going to go away. Neither are the problems. Whether interest rates go down or not, we ARE paying those interest amounts, month after month.

And let’s face it, no amount of sound logic is going to convince any of us who are inveterate spenders to slow down and maybe, you know,..spend less.

So, this will be just an exercise in questionable logic.

Do you wonder why when you just have Rs. 10000 to spend in a month, you end up spending twice that? How is that even possible?

Today is your lucky day.

Your income defines your shopping budget. Let say your monthly income is Rs. 25000; after expenses, let’s say you have Rs. 10000 free and clear. This is spending money, folks! Here comes the catch - Your shopping budget is actually twice that Rs. 10000! How? You know you can back Rs. 10000 worth of shopping on your credit card with this spending money. But when you are swiping that card, you know that you have a fifty day grace period before you gotta pay it back with interest. Guess what, your next pay will come in by then and with it comes another Rs. 10000 of spending money. So you are simply spending that money right now. Neat, eh?

Now, how do you do this smartly, so that you don’t default or end up paying exorbitant interest on all this?

Let’s say your credit card statement comes on the 5th of every month, and the due date of payment is the 25th of that month. Now, if you buy something on the 6th of the month, that purchase is listed only in next month’s statement. Which means, provided you pay up by every due date, you can blow the spending money of this month as well as the next month AND pay zero interest on the amount swiped on the card.

You are welcome.

I had a HSBC credit card, the dues of which were settled in August 2004 against a waiver of Rs. 8, 000. I had given out-station cheques towards the settlement which took 15 days to get cleared. The settlement letter which was received subsequently mentioned that there was not overdue and the card would be closed.

Recently, my personal loan application was rejected, the reason being that my name is in the defaulter’s list. On enquiring from HSBC, they informed that I am still to pay Rs. 49, 000 as the settlement stood null and void due to late payment whereas the settlement letter only said that it would be nullified in case of payment defect only. The delay in payment was due to the 15 day gap for cheque clearance. HSBC is demanding Rs 49, 000 to send a letter to CIBIL stating that I have cleared my outstanding. What do I do? Is there a legal route? Should I approach the Banking Ombudsman?

Citibank has imposed on me, a credit card without asking me and they billed for all sorts of insurance without my consent. When I did not pay, they sent my name to Credit Information Bureau (India) Ltd. After negotiations with Citibank, I cleared all the dues, and Citibank also gave me a certificate that no dues are pending and my credit card is also cancelled. Now, after going through your answers in HT (Saturday, Delhi edition), I have requested Credit Information Bureau (India) Ltd to reveal the credit status of mine. They refused to part with the information saying that they reveal the details only to the banks/financial institutions. I reminded them that according to Credit Information companies Regulations Act, 2005 they have to reveal the status on request. They declined to do so. When I wrote to Citibank, asking them to clarify if they wrote back to Credit Bureau after clearing the dues, there was no reply from their side also.

Are you aware that if you have a credit card from the bank that you have an account with, the bank is under no legal obligation to inform you before debiting your account towards your credit card outstanding?

For instance, let’s assume you have a credit card from the bank where you also have a savings account. You swiped your card towards a few purchases and ran up a hefty bill. Your credit card bill has come in. And the next one. And the next one. You have not paid off the dues despite repeated instructions from the bank.

The bank is now well within its right to freeze your account and debit a portion of the outstanding. These debits will continue until the outstanding is fully paid off. Meanwhile, you will not be able to operate your account (except perhaps to deposit money into it!). Once your dues are cleared, you will retrieve operating rights on your account.

Banks usually resort to this extreme after repeated letters and warnings. Note that the letters and warnings DO NOT warn you that they are going to dip into your savings account. That’s a surprise that will come completely undiluted once you line up at the bank ATM to withdraw much needed cash. Therefore, make sure that you pay at least the minimum required payment towards your credit card outstanding. Banks love customers who keep paying minimum payments. It means that the outstanding balance keeps collecting interest and let’s face it, banks love interest payments.

My father was using HDFC credit card. He passed away in January and has left no assets. I am a student doing my engineering. My mother passed away earlier and I am living with my aunts. I have borrowed money for my final year education and have no money to clear the outstanding credit in his name. I was told that credit card debt is unliable debt. The credit card company has been calling me and harassing me to quit education, beg or steal to repay them. Kindly advice me on what do I do next?