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Journalism of Courage
MUMBAI, SEPT 24: A recent survey by an independent survey agency has revealed the ignorance about the Indian credit cardholders about the various hidden charges by the issuing banks. Many of the credit cardholders are not even aware that they are paying a hefty interest of 36 per cent per annum.
8220;Credit cardholders must be educated about the usage and complex interest rates charged by the issuers to create a well-informed card base in the country,8221; says a study by Credit Card amp; Management Consultancy CCMC.
Nearly 65 per cent of the cardholders are unaware of the high interest rates charged on outstanding balance, says the study which surveyed over 10,000 cardholders in 15 cities across the country.
Commenting on the need for a study on plastic cards education and awareness, Vijay Mehta, chief consultant, CCMC said that it was surprising that a majority of the three million cardholders in the Rs 70,000 million domestic card industry is ignorant of the fundamentals of card products.
More than 70 percent of the cardholders were not aware of the facility of waiver of outstanding balance upon death of the holder, he said. Over 84 per cent of the cardholders believe that they are entitled to interest-free period ranging between 30 to 50 days, whereas in reality interest-free period is applicable only when monthly bills are completely settled, the study points out, calling for a concerted awareness campaign.
Nearly 60 per cent of the cardholders were unhappy with the credit limits offered on their credit cards and a string of hidden charges they are required to pay, the survey revealed. The study also reveals that there is a critical gap in the understanding of cardholders in areas such as interest rates and processing fees on outstation cheques which increase the financial liability.
Mehta said it is the responsibility of card companies to educate customers about what8217;s really behind the piece of plastic which customers are lapping up more than ever before.
While card companies do a good job ofexplaining all about new benefits and services, they could do much more to educate customers about the growing interest rates, transaction fees and the likes so as to make them financially responsible, he said.
