Credit card issue
Venkat Rao Marella
(Querist) 14 January 2012
This query is : Resolved
Sir,
I request experts to resolve my query on credit card related billing.
Facts:
• credit card issued in 2007 and was used actively till May – 2008. Validity as printed on the credit card – Jan 2009.
• Credit limit when issued – Rs. 26,000/-, Unpaid credit amount on June -2008 – Rs. 5,000/- Approx [This amount was neither disputed nor paid. It remained unpaid as the user missed out in numerous other transactions requiring his attention on domestic front].
• There has been a change in address as the user moved to another city. New contact details were not updated by the user with the credit card issuer.
After three years, in May 2011 the user is shocked to see his name reported to CIBIL as defaulter.
• CIBIL report shows the amount O/s from the user is Rs. 33,500/- and the bank has written off the card in its books.
• User voluntarily called the credit card issuer for clearing the actual amount he owed + interest thereon.
• Requested credit card company to provide for the breakup of outstanding amount which they said they cannot give as the data is very old.
Query:
• What is the rate of interest per annum which a credit card issuer can charge as per rules. Can this be specific to bank or has RBI come up with any such rules.
• Are there any laws in our Country which imposes rules on credit card companies from levying interest which cumulatively is more than original amount owed.
• Will there be any benefit to the user to argue that the credit card company cannot charge anything from him more than the credit limit which was given on the card [in this case the credit limit is Rs. 26,000/- where today the credit card issuer has charged Rs. 33,500/- which is more than credit limit available on the card].
• Now when the user wants to pay certain amount which is equal to amount owed + interest thereon till date, the bank wants him to an adhoc amount which is Rs. 30,000/- by way of final settlement. Is this tenable in law.
• Please suggest appropriate steps to be taken by the user for paying actual amount owed + interest thereon till date.
Thanks,
Venkat.
Raj Kumar Makkad
(Expert) 15 January 2012
It is the policy of the bank to charge a particular rate of interest from the card holders. As you have detailed disputes, it shall be better for you to make a complaint against the bank tp bank ombudsman who shall hear both parties and shall decide as per policy f the bank.
Shonee Kapoor
(Expert) 15 January 2012
Query:
• What is the rate of interest per annum which a credit card issuer can charge as per rules. Can this be specific to bank or has RBI come up with any such rules.
IT DIFFERS FROM BANK TO BANK, HOWEVER, 18% PER ANNUM IS THE CURRENT INDUSTRY STANDARD.
HOWEVER YOU SHOULD ALSO NOT FORGET THAT CREDIT CARD COMPANIES CHARGE NON-PAYMENT PENALTY RANGING BETWEEN RS. 300/- TO RS. 600/- PER MONTH APART FROM THE INTEREST.
• Are there any laws in our Country which imposes rules on credit card companies from levying interest which cumulatively is more than original amount owed.
NO
• Will there be any benefit to the user to argue that the credit card company cannot charge anything from him more than the credit limit which was given on the card [in this case the credit limit is Rs. 26,000/- where today the credit card issuer has charged Rs. 33,500/- which is more than credit limit available on the card].
NO, IT WOULD BE LIKE SAYING THAT I CAN SPEND RS. 26,000/- AND THEN NOT PAY YOU ANYTHING AND YOU STILL CAN NOT CHARGE ME ANY INTEREST ON THE SAME.
• Now when the user wants to pay certain amount which is equal to amount owed + interest thereon till date, the bank wants him to an adhoc amount which is Rs. 30,000/- by way of final settlement. Is this tenable in law.
IT CAN BE SETTLED MUTUALLY, WHEN THE BANK SEES THE MONEY COMING THEY WOULD SETTLE ANYWHERE. I THINK BANK KNOWS NOW THAT YOU WANT TO CLEAR YOUR NAME IN CIBIL AND YOU SEEM TO BE IN A HURRY AND THAT IS WHY THEY ARE NEGOTIATING HARD
• Please suggest appropriate steps to be taken by the user for paying actual amount owed + interest thereon till date.
HMMMMM, NEGOTIATE, ALL OTHER WAYS ARE MORE EXPENSIVE THAN THE AMOUNT WHICH IS OUTSTANDING
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
J. P. Shah
(Expert) 15 January 2012
Please also refer
http://www.lawyersclubindia.com/share_files/CREDIT-CARD-HARASSMENT-4971.asp
Sanjeev
(Expert) 15 January 2012
The credit card interest is charged approximately @ 30% p.a on the unpaid amount plus the penalties for non This is governed by the card holder agreement which is provided by the banks at the time of issuing the cards and also subsequently.
The amount charged would be correct based on the interest rates an penalties. This would need to be settled else bank would not clear the status in CIBIL
