Tip Tuesdays: Why You Should Not Own a Credit Card From a Bank Where You Also Have Other Deposits

by Vinaya HS on February 9, 2010

in Finance

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Because the bank has the right to dip into your savings and settle your credit card dues. An extract from HDFC Bank’s Most Important Terms & Conditions for Credit Cards (version 1.23) reads:

Right of Lien

The bank, at any time and without notice, will have lien and right to set-off all monies belonging to the Cardmember and/or add-on Cardmember standing to their credit in any account/custody of the bank, if upon demand by the bank, the balance amount on the card account is not repaid within the prescribed time.

Could be a sticky issue especially when you have any disputed and unresolved credit card transactions. To play it safe, it’s a good idea to avail a credit card from a bank where you don’t keep your other savings.

What do you think? What has been your experience in this matter?

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 2 comments… read them below or add one }

Minal February 11, 2010 at 9:06 AM

Hey- dropping in after a long time and as usual the- still tech unsavvy me is unable to make sense out of a lot of your posts. Still in Bangalore?

Anoop February 14, 2010 at 2:47 PM

This is an important information, I’ve already had unpleasant experiences with Canara bank dipping into my life savings and appropriating it with loan amount..It always turns out to be a killer and when we are in need for urgent money we find that there’s none left in our savings amount and the banks have no qualms about doing such things.

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