After the Reserve Bank of India’s new rules came into effect, issuers first cut costs by withdrawing the perks attached to the cards. There was also a steep hike in interest charged on outstanding amounts. Next, they encouraged what can only be called non-transparent and shady billing practices leading to endless disputes.

The most common of such practices is to consider all bills paid on the due date (especially cheques that are dropped into drop boxes at banks) as defaults although the rules rarely specify that the amount must actually be credited to the issuer before the due date.

Another widespread complaint is about bills that never reach in time or reach a customer just a few days before payment is due, instead of allowing a full fifteen days for payment. Card holders end up as defaulters even if they are travelling for a few days in that period. Another doubtful practice is to delay sending bills and employ call centres to call customers and persuade them to avoid a default by depositing a cheque for the minimum sum payable.

But the practice that very few card holders are aware about is best illustrated by this example. A person with a Rs one lakh limit on his credit card made a silly mistake and paid one rupee less on this credit card bill. He did not realise the mistake or know that this rupee got listed at ‘amount overdue’ in his account.

In the next month, he ran up a bill of Rs 50,000 on his card with the full intention of paying it off before the due date. To his horror, his card statement showed that he was charged overdue interest on Rs 50,001. Even the trivial sum of one ruppe was used to extort over due interest on his entire spending. He has had to file a complaint with the Reserve Bank of India to have the charges reversed.

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