The Aditya Birla Group-SBI co-branded credit cards

The Aditya Birla Group and SBI Card has announced a partnership to offer co-branded credit cards to all customers of the Aditya Birla Group companies.

The Aditya Birla Group-SBI co-branded credit cards will be available to over 28-million customers of Aditya Birla Group companies--Aditya Birla Retail, Aditya Birla Financial Services Group (which includes Birla Sun Life Insurance and Birla Sun Life Mutual Funds), IDEA and Madura Garments. 

When Cards become Foes

The initiative will be led by the financial services arm of the Aditya Birla Group -- Aditya Birla Financial Services, the release said.

The Aditya Birla Group already has a strong presence in the financial services business, as a significant player in the non-bank space. The card will be made available across more than 2000 retail outlets of Aditya Birla Group companies.

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Check on high Credit Card Interest

High interest rate charged by credit card companies have caught the attention of law makers and they have set up a key Parliamentary Standing Committee.

The committee has suggested that all credit card charges levied by credit card companies should not be left at the discretion of banks, urging RBI to regulate the credit card market closely.

"The RBI should review this matter and re-formulate their guidelines or norms governing credit card services with a view to providing the much-needed relief to the general public," the committee said in its report.

Most credit card companies charge interest rates around 3 percent per month for a credit card which on annualizing comes out to be more than 40 percent.

In its report the committee notes: "Banks have been given complete freedom to charge any rate of interest regardless of their benchmark prime lending rates, thereby enabling them to charge exorbitant/usurious interest."

Do's and Dont's with your Credit Card

Credit card companies defend their stand of charging high interest rates by saying that credit is totally unsecured and therefore pose a greater risk to the credit card companies.

The recommendations of the committee are not mandatory but the government has to present an action taken report to justify its action in case it does not accept the recommendation.

Defaults in the credit card segment are over 15 percent for most lenders, highlighting the risk associated with the business. Risks are higher because companies depend on internal due diligence before giving out cards.

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Credit Card Default Settlement - Step by Step Guide

Here is how you have to deal with it. When you have queries on credit card defaults and delayed payments which has taken the payment obligation of the banker to few Lakh rupees.

Talk to the bank who issued the card and tell them you would like to settle off in good faith and ask for concession and negotiate hard, yes put all your negotiation skills to work here.

Once you both settle on some amount these are the steps you MUST and Should follow. It is better to negotiate with the bank itself rather than the collection agent because Bank Pays to the Collection Agent commission as high as 15% of the recovered amount and he will haress you until you pay it to the bank because the agent is awaiting his comission.

§         Get a letter from the bank in which they mention "Final Settlement of Outstanding dues" with your complete name, address and credit card number on which you have defaulted.                                                                                                      

§         Make your payment by CROSSED CHEQUE only

§         As soon as the payment is done, close this credit card account by giving writing instructions saying w.r.t Final Settlement, I have cleared all the dues and want this account to be closed. [Keep a proof of closing this account, say banker stamps on the second copy of the lettr or send it by registeredA.D]

• Preserve all this documentation for the next 5 years, atleast.
• Chances are the your name will be in the CIBIL defaulters list, give time of 6 months before you apply for another loan so that the bank clears your name off defaulters list.

§         Work and Plan your finances well before you opt for any other form of credit - card, personal Loan, auto loan etc

§         Next time when you apply for any kind of credit, if your name is still in the defaulters list, then you have every right to know on which account you have defaulted. If this is the same as the credit card account on which you have defaulted, then all those documents of Final Settlement, crossed Cheque payment will come in handy here. Attach attested photocopies and try to get your name cleared off the defaulters list. Don't submit the originals you have.

§         And finally you have to live with this painful process.

If Settlement Amount is as Large as Rs 300,000 [3 Lakh] ? Hire a lawyer because the deal is big and in any case save all the documentation.

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Getting higher limit in your Credit Card

There is a specified credit limit available on a credit card for a person. This limit is the amount till which a bank will allow an individual to spend on his/her card. The cardholder will have to ensure that the total amount of use on the card does not exceed this figure. There are also times when one would like to see the available credit limit increased so that higher spends are possible. Here is the manner in which this can be achieved depending upon the situation.

Natural increase

Credit card issuing banks continuously monitor the extent of the use of a credit card along with the payment habit of the cardholder. One of the ways in which a good record is built up is by ensuring that the various dealings with respect to the card are handled properly. A responsible behaviour which means making regular payments along with the regular use of the card that is near the overall limit will be one factor that will be monitored. Once there is an adequate record the bank is likely to offer a higher credit limit to the cardholder. The rise might not be very high as compared to the previous limit but just enough to ensure that there is a higher amount available for the cardholder to spend on his/her card.

Credit card customers must read fine print

Supporting documents

Often there is a situation where the individual has had a significant rise in the salary or there might even be a shift of jobs, which results in a higher pay coming in. This will also require a higher use of the credit card for which a higher limit is required. A way in which a higher limit can then be availed from the issuing bank is by supplying it with the necessary details. This will enable the bank to evaluate the existing position of the cardholder and after seeing a rise in the level of the income the lender is likely to give a higher credit limit on the card. This will help one in using the card better and will also suit the changed conditions that are now applicable.

Change card

There are times when the existing limit on a credit card remains very low. This could be because the card was issued long ago or that a particular bank is assigning a low credit amount for the person. In such a situation, there might not be any significant rise in the limit even though there are efforts to convince the existing bank. Here, there is a better alternative available for you. This would consist of changing the credit card or even the bank issuing the card. This will involve applying for a new credit card with the necessary details to the bank. This will ensure that the new card is then taken on the basis of the latest information, which will also mean that the limit is likely to be higher for this card while the older card with the other bank can be cancelled and given back. Another route is to upgrade the card that is held by you. This will mean moving from a gold card to a platinum card and this is possible when you fulfill the required conditions. Both these steps will also ensure that there is no rise in the number of credit cards that are carried around but at the same time there is an effective use made of the limit and this has been revised upwards.

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