I have availed a home loan from an MNC bank at an interest rate of 9%. They have revised rates of interest several time and current rate stands at 12.50%, since 1/8/08 ( previously it was 11.75%). Last year in August, they raised rates by 2% in one go and after lot of arguments and conversation, the rate was agreed at 10.25%. The requisite changes have still not been made. On asking the bank, I got to know that the executive who had made this commitment had no authority. I have written several times to several heads without receiving any response till date. All my EMI payments have been regular in spite of an increased interest rate. I have once again received yet another letter regarding revision of the interest rate, now to 12.50%-which is very high.

Know your rights as a credit card customer. Because, it is not just that your payment record is independent of anything else. Your payment record can affect your financial planning, such as loan applications.

Consider the consumer who has been pristine in keeping up card payments, without defaults and on time. This person has a personal loan as well which he has been exemplary in keeping up with EMI payments. Now, if this person were to default on just one payment, his credit rating goes for a toss. The next credit card he applies for, nine out of ten times he would be rejected as being a defaulter.

Credit rating agencies do not capture the accent of defaults. One-off defaults are given the same weightage as serial defaults. Which means, in the above-mentioned example, the guy is on par with the slacker who has taken a personal loan, defaulted multiple times on his repayments and is waiting for divine intervention or daddy to get him through to safe ground.

The sad part is we cannot do anything about this. But there is an indirect way of dealing with this. Always be aware that you are well within your rights to know the reason why your credit card application was rejected. The RBI, on 24 July 2008, has issued fresh guidelines for the credit card issuers that the issuers should not reject a credit card application without assigning reasons in writing. So if the bank refuses to give a reason for the rejection, you can and should approach the Banking Ombudsman (www.bankingombudsman.rbi.org.in)