Aug 04, 2011 07:10 PM IST | Source: Moneycontrol.com

Credit card: Spend 1 lakh, pay 2.62 lakh

SO you have one of those gold credit cards that offer you a credit limit of Rs 1 lakh? Great, but does that mean you can make purchases till the maximum credit limit. No, even when you pay your dues on time, this is best avoided.

Credit card: Spend 1 lakh, pay 2.62 lakh

SO you have one of those gold credit cards that offer you a credit limit of Rs 1 lakh? Great, but does that mean you can make purchases till the maximum credit limit. No, even when you pay your dues on time, this is best avoided. Also, there is no upper limit to the interest rates charged on credit cards. Let's recount a case about the rising interest rates levied on credit cards.

Recounting the case
A consumer group, Awaaz had moved the National Consumer Commission in 2008 over the rising interest rates that sometimes touched 90 per cent for defaulters including hidden costs.

The consumer group's argument centered around the fact that there was no check on the rising interest rates levied by the banks on credit card users and defaulters.

RBI's policy states that banks are free to exercise their right in determining interest rates that fall under the category of non-priority sector personal loans, regardless of the size, without referring to the benchmark prime lending rate (BPLR).

 

 

 

 

The commission had set a cap of 30 per cent on the interest rate for credit cards, which was to be brought into effect by February 13, 2009. However, in September 2008, the Indian Banks

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