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  #1  
Old 18th May 2007, 08:34 AM
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Default Banks offering Free Credit Cards



i am getting calls for the past two days from icici , sbi saying they are offering free gold cards, no annual fee, life time free. is there any catch in this ? how come they are offering it free
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  #2  
Old 18th May 2007, 10:48 AM
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Originally Posted by SticKer View Post
i am getting calls for the past two days from icici , sbi saying they are offering free gold cards, no annual fee, life time free. is there any catch in this ? how come they are offering it free
No, there is no catch - these are lifetime free for sure.

These established banks have large scale credit card operations.

Their overheads cost per card is not much.

Also, they may lose some interest for the interest free period which is 20-50 days usually.

However the interest charged by them after this period is nearly 3% per month or over 40% annualized.

Thus a small number of people paying interest, compensates for most who do not pay interest (and pay bills on time.)

Also a Credit Card relationship means ICICI(or any other bank) gets to grow it's customer base with little effort. Many credit card holders would open accounts with ICICI and may also buy other financial products.

Thus I can sum it up like this - many banks offer free credit cards as:
-Economics of size - their operating cost per card is very low.
-Few people paying high interest compensate for many who do not pay interest.
-Helps banks grow their customer base and goodwill.
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  #3  
Old 20th May 2007, 02:59 AM
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But does it mean that one doesnt need to deposit anything with the bank.. like u earlier mentioned of easy deposit where one can avail a credit card for fixed deposit. Would this be a valid VISA credit card and what would be the eligibility criteria for this one?
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  #4  
Old 20th May 2007, 08:21 AM
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But does it mean that one doesnt need to deposit anything with the bank.. like u earlier mentioned of easy deposit where one can avail a credit card for fixed deposit. Would this be a valid VISA credit card and what would be the eligibility criteria for this one?
There are two types of Credit Cards.

1.Unsecured
2.Secured.

Unsecured is the type of credit card which a bank gives looking at your income and credit record. The usual interest rate charged on such a card in India is 3%.

Secured credit card is a credit card which is given against a security. This is usually a fixed deposit in India.

People who do not have an income proof or have a bad credit history, can opt for a secured credit card. However as the credit card has a security, there is less risk for the bank and thus the bank charges a lower interest rate - which is currently around 1% in India.
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Old 20th May 2007, 11:37 PM
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Hey thanks a lot for clarifying that one.
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  #6  
Old 21st May 2007, 07:57 AM
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on what do they charge interest ? coz they say its lifetime free, no annual fees.
are you saying the interest that is charged is on the purchases made by the card ?
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  #7  
Old 21st May 2007, 01:35 PM
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Originally Posted by SticKer View Post
on what do they charge interest ? coz they say its lifetime free, no annual fees.
are you saying the interest that is charged is on the purchases made by the card ?
Yes it is charged on purchases. Lifetime free means there are no annual charges.

There is a interest free period...after the interest free period is over, you have to pay interest.

For example if your billing cycle is 1-30 of every month...the interest free period ends 20 days after the last day of the billing period.

If you pay back the amount owed, before next month's 20th, you don't have to pay any interest. After that, the bank will charge interest.
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  #8  
Old 22nd May 2007, 09:45 AM
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ohok thats nice, thanks for clearing my doubt Alchemist
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  #9  
Old 9th June 2008, 04:18 PM
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Default How Banks usurp ur money!!

Regarding this i ad read a writeup which mentioned ways a credit card issuing bank
may end up fining its customers...

The following are the ways banks... find ways to fine you.

You don't pay the minimum amount due
You revolve your balance
You cross your credit limit
You transfer your balance from other cards
You withdraw cash
You forget to pay your annual charges


also provided is a table which shows how much different banks charge
when u default.

link to the article is this : Credit Card Fines



Armaan!
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  #10  
Old 13th September 2008, 05:37 PM
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hdfc has offered me a gold lifetime credit card which I took about a year ago but never used it till date .

I wanted to get rid of their everyday calls asking to get a card.

I prefer debit card which I just use for withdrawing funds from ATM. .
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  #11  
Old 13th September 2008, 06:38 PM
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Originally Posted by Newby View Post
hdfc has offered me a gold lifetime credit card which I took about a year ago but never used it till date .

I wanted to get rid of their everyday calls asking to get a card.

I prefer debit card which I just use for withdrawing funds from ATM. .
good choice to have a debit card,

But,

When you need to do payment online or overseas payment, then you need credit card..

At that point most of the debit cards do not work.

I also doubt whether you can book your local air /train tickets online by debit cards?

Btw Does anyone know if any bank offer to pay by online internet account direct to airlines for air ticket. (locally)

So it depends on individual

Rgds.

Last edited by San Yad : 13th September 2008 at 06:44 PM.
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  #12  
Old 15th September 2008, 03:58 PM
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Quote:
Originally Posted by Newby View Post
hdfc has offered me a gold lifetime credit card which I took about a year ago but never used it till date .

I wanted to get rid of their everyday calls asking to get a card.

I prefer debit card which I just use for withdrawing funds from ATM. .
I believe you should have one credit card and track the statement date. I clear the funds/balance on fortnightly basis. Better to have online access to the credit card transactions. It helps in online transaction though you can create virtual credit cards if you have savings account with Kotak or HDFC bank.
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  #13  
Old 15th September 2008, 11:01 PM
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Originally Posted by aka_iitd View Post
I believe you should have one credit card and track the statement date. I clear the funds/balance on fortnightly basis. Better to have online access to the credit card transactions. It helps in online transaction though you can create virtual credit cards if you have savings account with Kotak or HDFC bank.
well friend I have never used it to date, have it since nearly 1 year now. .
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  #14  
Old 16th September 2008, 12:52 AM
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well friend I have never used it to date, have it since nearly 1 year now. .
If you aren't using your credit card, it is better to return it.

Credit cards are not risk-free.

If someone just gets hold of your credit card number and VCC, he can use it to make payments.

Then, you will be the one who has to pay the bills.
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  #15  
Old 16th September 2008, 11:47 AM
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Originally Posted by Alchemist View Post
If you aren't using your credit card, it is better to return it.

Credit cards are not risk-free.

If someone just gets hold of your credit card number and VCC, he can use it to make payments.

Then, you will be the one who has to pay the bills.
thanks Alchemist,but I don't keep it with me in my wallet.I have locked and kept it in my cupboard. .

will use it some day.
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  #16  
Old 23rd November 2008, 04:44 PM
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Originally Posted by Alchemist View Post
Credit cards are not risk-free.
True.

Quote:
Originally Posted by Alchemist View Post
If someone just gets hold of your credit card number and VCC, he can use it to make payments.

Then, you will be the one who has to pay the bills.
No, you can always dispute the transaction.

Last edited by vinvest : 23rd November 2008 at 05:00 PM.
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  #17  
Old 23rd November 2008, 04:51 PM
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Quote:
Originally Posted by Newby View Post
hdfc has offered me a gold lifetime credit card which I took about a year ago but never used it till date .

I wanted to get rid of their everyday calls asking to get a card.

I prefer debit card which I just use for withdrawing funds from ATM. .
That's a good idea. I also always use my debit card only as an ATM card, never outside the ATM machine.

The safest is a plain vanilla ATM card. Unfortunately very few banks offer it (Citibank offers it. SBI offers it). Other banks don't. In the US etc, every bank gives a ATM+Debit Card by default - but if you tell them you want a plain ATM card, they always give that you & deactivate your Debit Card.

A debit card is far more risky than a credit card.

Also, I never pay Rs.100 for a debit card - all my accounts have been opened as salary accounts, where they don't charge for a debit card. It's really stupid to pay Rs. 100 for a tool which helps the bank as much as it helps you.
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  #18  
Old 23rd November 2008, 04:59 PM
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Originally Posted by Alchemist View Post
Thus I can sum it up like this - many banks offer free credit cards as:
-Economics of size - their operating cost per card is very low.
-Few people paying high interest compensate for many who do not pay interest.
-Helps banks grow their customer base and goodwill.
Credit card is also a tool for bill discounting. If you buy something from a merchant for Rs. 100 & use your credit card - essentially you are giving a IOU for Rs. 100 to the merchant. The bank buys the IOU from a merchant at a discount.
i.e. the bank buys the IOU from the merchant for Rs. 96. Even if you pay the bank before the due date, the bank doesn't lose the money for the 20 days you pay it after the billing date, because it has paid the merchant only the discounted rate.

(This is a simplistic picture - in reality, there are other factors like credit issuing bank, the transaction processing bank etc).
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  #19  
Old 23rd November 2008, 06:46 PM
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No, you can always dispute the transaction.
True, but there is no guarantee that the final decision will go in customer's favour.

This is a reply that a customer got from ABN AMRO Bank for a dispute that he raised.

Quote:
We would like to advise you that transactions on the Internet can be carried out only by a person in possession of the card plastic as the authorization requires the card number, expiry date and the three digit cvv value on the reverse of the card plastic.

Under these circumstances the Bank would not be able to raise a charge dispute for the transactions and we would request you to raise the issue with the merchant directly.
Source.

I had the same problem as the person above.

I filed a dispute with ICICI Bank and fortunately I got my money back.
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