My First Credit Card Experience

by Vinaya HS on October 11, 2011

in Finance

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My first tryst with a credit card was about twelve or thirteen years back. My elder sister had just started work at a local software firm where her salary was directly credited into an HSBC Savings Account. Not too later, HSBC offered her a Silver Credit Card with a grand credit limit of Rs 20,000. For some reason, my sister thought that I’d be much better at managing the credit card bills and therefore assigned that task to me.

The first bill came. The minimum payment due indicated was Rs 100. I promptly got my sister to sign a check for Rs 100 and dropped it at the nearest check collection drop box. Happy as you can be.

The second bill came. Late payment fee, interest charges, etc. appeared on the statement.

Wow! Wait a minute! I didn’t know that. So that’s how credit cards work.

Somehow I forgot that lesson because a couple of years later after I started work, I ended up with an outstanding credit balance in six-figures on an American Express credit card and no bank balance to pay it off. Lessons learned the hard way. That’s also why you’ll find a good number of articles on credit cards in the archives.

Today, I have three credit cards that I mainly use when traveling and occasionally for other odds and ends. I still don’t carry a credit card in my wallet. Reward points and cash backs don’t tempt me. I flatly refuse all EMI-conversion options. In fact, one of my credit cards automatically hiked-up my credit limit looking at my spotless payment track record.

A far cry from those days when I couldn’t sleep just thinking about how I’d pay the credit card bills. But I still don’t know why Kotak Mahindra rejected my card application for “other reasons.” Who cares!




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{ 2 comments… read them below or add one }

JoeKidd November 4, 2011 at 9:06 PM

A friend of mine in the US said that if you have a spotless track record with your credit card i.e. you always pay your full outstanding amount before the due date, some of the card companies will not renew your card since you are not really generating them much income. So my friend used you leave a minimum amount unpaid any one month of the year and pay up the next month so that in the books of the card company he is marked as a interest generator (and he need not fear a non renewal of his card).

Vinaya H S November 8, 2011 at 9:18 PM

@JoeKidd:

Interesting. But I haven’t yet heard of such a thing happening in India.

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