Circa 2004, when i received my first credit card the most worried person was my father. I was fresh out of college in my first job. Moreover, during those days it was very easy to avail credit card. My father believed that it's too early for me to use a credit card. Though back of the mind his key concern was that if i will spend more on credit card beyond repayment capacity then the bill will be on him :) . Though from day 1, i ensured credit card payment or usage within my means to avoid Debt Trap. There was a study done by FMCG company on the shopping behavior of buyers. The same buyer ... Read More
How Credit Card Companies Make Money or Earn Profit
Recently one of the new age private banks forays into the credit card business. One of my clients asked me why we have so many credit card companies. The reason being, it becomes more difficult to select the right credit card. In India, only banks can offer a credit card. Here by credit card companies i mean banks including their partners, marketing agencies, sales agents etc. From bird's eye view, it is a charitable business. A bank issues a credit card to the customer. Customer use the card and bank provide temporary credit. Customer pays the bill and that's it. Prima facie the only source ... Read More
Why High CIBIL Score Does Not Guarantee Loan or Credit Card
High CIBIL Score does not guarantee loan or credit facility. I keep highlighting this point in my posts on CIBIL Score. Recently, one of the blog readers wrote to me that his home loan is rejected despite a CIBIL Score of 800. I do understand the pain and agony. At the same time, it is important for potential borrowers to understand the importance of credit behavior. Unfortunately, it is getting more difficult to avail credit or loan facility with each passing day. Business of High CIBIL Score and Marketing Strategy There are a lot of 3rd party credit agencies in the market promising a ... Read More
Financial Fraud – Beware of 5 New Tricks from Tricksters
Financial Fraud is now an organized sector. In past, i wrote various posts on how to avoid credit card frauds and safety of banking transactions. Daily the tricksters are finding new ways of financial fraud. The victim is caught unaware. The biggest problem is that victim does not know what to do in case of financial fraud. In a recent case, one of my clients became a victim of financial fraud through net banking. He went to local police station to register FIR. The police official refused to register his complaint/FIR. When the victim insisted, the police registered NC. The police told him to ... Read More
Banking Transactions – Are they really SAFE?
A couple of my recent Banking Transactions inspired me to write this post. Despite the efforts from RBI, the fraudulent transactions are on the rise. The fraudsters take advantage of a loophole in Banking process to exploit the same. For ease of understanding in this post, i will refer all the transactions i.e. Credit Card, Debit Card or Net Banking as Banking Transactions. Most of the frauds are carried out from outside India so that the fraudster remain out of the clutches of India Law. Big frauds hog limelight in newspaper reports but the majority of frauds are of small value. Some time ... Read More
Secured Credit Cards – Repair CIBIL Score
Secured Credit Card is a Blessing in Disguise. Why i said this because Life is unforgiving and so as Poor CIBIL Score / Credit Score. Once an individual is in this sad situation, it is very difficult to come out. A borrower is at the mercy of a lender for CIBIL Score. There is no place for human emotions in the mortgage industry. In many cases, i observed that there was "No" intent of a borrower to default on payment. Such a default is also known as non-willful default. The irony is that both willful and non-willful defaulters are being beaten with same the stick. In case of non-willful ... Read More