Scammed using a Credit Card! Bad Experience! Why?

credit card

Hey Everyone, in the last blog we talked about the Advantages of a CC. In this blog, you’ll be going to know about some major disadvantages of using a credit card.

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Table of Contents

Annual Fees on a Credit Card

On a credit card, there are some charges we have to pay to the bank. For Example, there’s a joining fee as well as a yearly fee. Man of the consumers gets a CC without knowing about this fee. As the bank mentions the yearly fee is of very small characters and two small stars(**).  They ask the consumer to use that CC on transactions.

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And your joining fee will refund to you as reward points. We can only utilize these reward points to redeem such items which even we don’t use.  Also, many of the CC providers have a clause that if you utilize a particular amount on the CC. Then your yearly fee for next year will become free.

High Rate of Interest (ROI)

To give an example of this, You have a CC with a limit of Rs.50,000. You do some shopping within this limit and utilize it. Then you can check the chargeable interest on the website or app for your purchases. You’ll get an option there to make EMI of the bill of your CC. But even if you do complete swipe with a card, you’ll start to receive some calls, texts. In these calls or texts, they’ll offer you easy EMI. In this, they’ll make an EMI of your CC bill. And they’ll make an EMI of Rs.6,000 a month. But they calculate the ROI by taking 24-36% of interest. Also, if you see online 15-20% of interest is openly chargeable. And this percentage will increase as the tenure will increase. For example, 12 months with 15%, 24 months with 20%.

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(Image source- Phir Hera Pheri)

Easy EMIs with Credit Card

In the advantages, we explain to you about the no-cost EMIs. You’ll get a lot of the benefit from that. But there’s also a hidden term which we should know. In this some banks like Bajaj Finserv, HDFC they take some processing fee such as Rs.200. If you’re taking no-cost EMI, then this charge will be charged. Instead of this when you visit the no-cost EMI there’s a clause. In this, they describe that they’re providing it to you as the yearly interest you have to pay. They’re giving this discount now. But, when the bank charges interest you’ve to pay it. Also, there’s a point that we have to pay GST of interest as well while charging interest from someone.

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This means if you pay Rs. 50,000 for a product, interest will be Rs.5,000. And at Rs.5,000 18% of GST will be Rs.800. So if you debit Rs.50,000 from a CC then Rs.800 will be for GST and Rs.200 of charges if any. A total of Rs.51,000 you’ve to pay.

(Image Source- Phir Hera Pheri)

Frauds with Credit Card

If we’re talking about CC, then how can we forget Frauds? As most of the frauds were happens with CC.

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To give an Example of CC frauds here’s one that happened with Chandan Bhulani aka Sarcastic Sindhi. About 2-3 years ago, he was sharing his Netflix account with his friend in Dubai. That Netflix Account was linking with Chandan’s CC. Now next month he doesn’t want to renew his membership. But he forgot to share this with his friend. And his friend renewed the membership from Dubai. As Chandan’s CC is linking to that account, the money gets to deduct from Chandan’s CC. And he receives the message of money deduction in AED. After some research, he notices that his friend did that from Dubai. Also, Netflix resolves the issue and refunds his money.

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But if he got a delay in reporting that issue he will not get his money back. As the Banks were having a policy, If someone does fraud with you. Then you should report it within a specific period.

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Also, Subscribe to Sarcastic Sindhi’s YouTube Channel to Get safe from these Frauds & Scams


CIBIL Score with CC

In the advantages, we show how you can get loans with very fewer interest rates. But this might also be a huge problem if we do not pay the CC bill on time. Even if you pay Rs.500 or Rs.1,000 this will not affect your score. The score will go on to the negative side. For Example, if you’re even 4 days late in paying the bill. Then you could get a 36% per annum interest as well as a late fee. So you should pay all the bills on time, to protect yourself from the financial crisis.

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Overspending with Credit Card

To give an example, some people have a credit card and earns only Rs.30,000.  That’s not the issue. The issue is when they buy an item worth Rs.60,000. Which is just double the expensive of their income.

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Which makes a lot of trouble because of a lot of the interest rates or taxes.  By this, that person gets in huge trouble as he has to pay three months of their Income. The conclusion is that we should not do overspending on a CC.

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Cash Withdrawals with Credit Card

Many of the banks highly promote their CCs as the Cash Withdraw Facility for an emergency. They say take our CC to any ATM and withdraw money. Never even try to withdraw money from CCs, due to very-very high taxes on withdrawals. Even if you withdraw Rs.500 using CC, you’ll get Rs.250 as the fee +18% of GST. All of these changes make a total deduction of close to Rs.800. Out of it, you’ll get only Rs.500 and the bank will receive Rs.300. Also, these taxes vary upon the times of withdrawal per month.

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That’s it for today’s blog. Hope you found this blog informative. we’ll meet in the next blog. If you’ve any queries, comment down below. Until then Stay Sarcastic, Stay Safe.

Written by sarcasticsindhi

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