Category: General

Why you should do background check for small real estate builders

Posted on by Jagoinvestor

Should you buy real estate properties from small builders ? While you keep hearing about big real estate projects, there are tons of buildings and buildings and apartments build by small builders also and they are quite high in number. Today I want to share 3 instances of dealing with small builders.

Builders Background check

Case 1 : Real life case of Real Estate Fraud

One of the readers had invested in a property with a small size builder , but now he found out that the builder is arrested for fraud. He is now stuck with the investment and paying the EMI for the property whose future he is not sure about. Here is the full case

In Jan 2011 i have booked,Registered and stamp duty paid property located at Navi Mumbai(CIDCO property)and all the required documents are submitted to HDFC for under construction property.After verification and search report the Loan sanctioned. The payments are made according to Demands and Work completion by developer on time to time basis.Till the 70% of work completion all the payments are made(April 2012),but after that 19th July 2012 the developer has arrested by local police for cheating and fruad registration(Double registration) on his running projects.

In this issue he was arrested and the news spread across through all the media news papers that Customers are Cheated for Crores of rupees by Navi Mumbai Developer since May 2012.In this case on his arrest i have also made police complaint that, “The construction work has stopped since last two months and Developer has shut his office and mobile.According to media news i am also feeling that i was cheated and the home loan EMI are still there.”Now the developer and Police is also asking me to take back my complaint otherwise developer will sell that property to others and only give me the money which i have paid till the date. When i asked my bank about this to kinldy hold my EMI till the issue will solved.How do i pay EMI of the loan which i took for my Home and without getting home how do i proceed further for EMI?Bank said,”We have given a Loan to you not developer,even though all the documents are clear from Developer according to procedure.And my registration documents are Mortgage with the bank.So i have pay the EMI for the 70% Loan amount which i took from bank till the 70% work completion by developer.”Now i am paying EMI’s without getting Home. So guys pls think 100 of times before proceeding for Under-construction property.It doesnot matter whether it is a branded or Unbranded(Known/unknown Builder)

Case 2 : Unathorised Floor in the Project

One of the readers shared on our jagoinvestor forum that he has invested in a real estate project by a small builder, but the builder has violated rules and added another floor without approval. Now his money is stuck with the builder and he is not able to take any concrete decision

Recently I have booked a flat in bangalore with a small time builder. The catch is he has got approval (BBMP approval) for G+4 floors but he built an extra floor (My flat is on 4th floor). Does SBI approves the loan for apartment in such project? The builder is saying that there are 20+ loan approved from SBI (total 120 flats in project) and he will get my loan approved as well. He is also saying this is quite common practice now a days in Bangalore and he will keep this floor for renting purpose only.

Even if SBI approves my loan, should I buy this flat? What are the complications, I would face in future if selling off this flat (or will live in that flat). I have given 20% of the money as booking amount.
What are your suggestions in my case?

Case 3 : Builder not replying to many queries

I had a terrifying experience with a small builder, who projects himself as a Mid size builder(He completed one small project, of 20-30 flats and he himself given promotion as midsize builder and compares himself with some reputed mid size builders in Chennai).

I got all the documents from builder in a professional way(he gave all documents in set saying these are the documents required for legal verification) and gone for a lawyer verification(its my mistake not to wait for lawyer opinion) and he gave me enough evidences that he applied for a project approval form SBI( I told him, i will get HL only form SBI, after reading articles in Jagoinvester, Thanks to Jagoinvester for their precious articles) i believed him because he behaved very professionally(He is educated and worked for a consulting firm for more then a decade, making me believing he is professional) and i overshoot-ed the lawyers advice( i didn’t receive it for 15 working days) and made agreement and paid 20% of the property cost and then got a call form lawyer(actually lawyer couriered me the docs, but I didn’t receive them) saying courier was returned and he asked me to make a personal visit to his office.

The facts came into the picture with 10 queries( all of them are so simple like EC patta and couple of explanations) and i sent the same list to my builder and got promised, those silly queries will be answered in 5 days, and i waited for 15 days but no reply to lawyer from builder and after repeated follow-ups’(not with Mr. Professional, but with a staff in builders office) finally she went with answers and from my side i too gave the agreement copy for further evaluation and final advice from lawyer( as he is empanelled with SBI, it can be submitted for loan processing). The horrifying truths came out, he further raised additional queries and a builder cheating was projected. There are multiple problems in the land (it is total of 1.5 Acer).

1. Some part of the land was amortized with a PSU (not SBI) for 50L and he paid the amount in the month of July and obtained NOC (still the documents are under encumbrance) and attached the NOC with the documents and he is giving for customers for property verification. But when my lawyer made a background verification( as he has good networking with many bankers), it came to the limelight that he obtained loan again for 50L in the same bank after a month of time.

2. some part of this land is hereditary(legal heirs are 2 brothers and one sister) , sister didn’t sign the document and her brothers sold(here it is JV) the land to the developer, got her signature as witness.After some time she can go and fight legally for her rights on the property, and lawyer requested for a rectification deed and he objected and told he can provide a NOC(generally NOC is valid for 6 months of time, i really don’t know how NOC is valid in this contest)

3. DTCP approval is not obtained

4. There is difference in land available as per patta and land showing in project documents

5. Parent documents before 2004 are missing and told those can’t be retrieved

After presenting all the above(only critical are mentioned) queries, he tried to convince me and get my loan from some other financiers(of course i have a option to choose form PSU and NON-PSU), and offered some gifts (as he is planning to market his flats in Diwali offer such as free modular kitchen,( he increased the price of the flat by rs.200, but not for my booking, as I have done it earlier. Just to hold my booking he offered me this Diwali gifts)) and some other junk promises. I demanded for immediate cancellation of booking and refund all amount on the same day. However, I am in confusion state. If he clears all the above queries it is a great deal in that area and the price I paid was killer price.
I requested him to put all his words in a piece of paper (of course it is a judicial stamp paper of Rs.20, again Kudus to Jagoinvester for education me how to deal in such cases, especially with builders)Got a concrete promise to fix the queries in 15 working days else the entire amount will be refunded. 15 days passed and I have no communication from builder or from his office.On the final day I gave a call, asked him the status, and got a horrifying answer that he is still fixing the problems and when questioned deeply, got the terror answer that he did not start anything until date. Moreover, requesting me to wait for another 2 weeks.

I rejected his request and told him to arrange for cancellation deed and check, for the amount, and he rejected saying he will deduct rs.25 as per agreement. I initially rejected his check and told him I will collect the amount what ever after presenting the issue in front of consumers forum. Moreover, after short conversation he realized that I would make mess( i searched this property in internet and he also told me 70% of his customers are thru internet) if the total amount were not refunded. So guys please be aware and do a lot of background checking before investing your hard earned money.

Vultures are all around us in the form of builders, relaters and especially mediates or brokers or agents or what ever it is… (via)

Background Check of Builders before you purchase Property

It would not be fair to say that one should avoid small builders, but one has to be more cautious with the small builders compared to bigger ones. Here are the 5 things one should always check before they deal with a builder – small or big. This checklist will make sure that your pain is reduced later and the chances of getting in trouble will be minimised.

1. Enquire about their previously Completed Projects

You should always ask them directly about the previous projects they have completed. Better visit them too, and ask the locals and people living there about delays if any and the issues they faced. You should also search about those projects on internet and watch out for any grievances and complaints.

2. Check if they are part of some builders association

There are few associations and groups for builders community and there are codes of conduct defined for builders. Some of those associations are “Builders’ Association of India” (BAI) and “Confederation of Real Estate Developers Association of India” (CREDAI). Its always a good idea to watch out if the builder you are dealing with is a part of those associations or not. While you can’t say that not being a member is always a wrong thing, but you can always ask him why he is not a member. I would say a builder who is part of those association would be more serious and professional compared to other small time builder.

3. Check the rules incase of Delay or Cancellation of Project

You should always ask for the rules and terms and condition which will apply incase of delay or cancellation of the project. Ask them for an agreement copy even before paying the booking amount. Do not get too impulsive with the project and hurry. Watch “Compensation clause” which talks about the compensation paid to the buyer in case of any issues.

4. Search on internet for his review and past

Always do a thorough research about the builder and his quality of work on internet and different forums. While in general all the builders have some or the other bad reviews from someone, watch out that the internet should not be filled with bad reviews totally! In case you do not find any information or very little information about the builder, then you are mostly dealing with some new guy in town, who might be truly unprofessional. Avoid it.

Do you know someone who had dealt with small builder and was stuck with the situation or faced any issue? This can even happen with big builders. Share your experiences in comments section…

Best bank in India – With survey & Customer reviews

Posted on by Jagoinvestor

Which is the best bank in India? Is it yours ? In this article, we will look at the top 6 parameters which define a good bank and look at various Indian banks and how they fared on those parameters. The best way to find out how good a bank is to ask the existing account holders. So I ran a big survey on the topic of “Which is the best bank in India?” and a huge 2,418 people took that survey!

In the survey we counted how many people had a particular bank account and it was not a surprise that 76% of the market share was from the top 4 banks which were State Bank of India (SBI bank) , ICICI bank, HDFC Bank and Axis Bank . Rest 24% consisted of all the other banks combined. Other than this, we had also asked how long were their bank accounts . 77% of the bank accounts were at least 3 yrs old, which means that a person taking the survey had a fair understanding of his/her bank. Below is the graph showing the exact numbers

Indian banks market share

6 parameters of a Great bank

Banking is the core financial service any individual uses. There are hundreds of bank in India with millions of bank accounts and a person might have no other financial product or investment, but he will always have a bank account. One has to deal with banks all the time, be it credit card, home loan (Read Best Bank for Home Loan), auto loan, personal loans or any normal banking service, so one can not escape banking.

So its very crucial that one has a great bank that treats it’s customers well. So what defines a great bank? What we did, is define 6 parameters on which a bank can be judged.

1. Customer Care of the bank

For any issue we call our bank customer care, the quality of a bank customer care shows how much care a bank wants to take of their customers. Customer care is what you would need a lot of times and it’s of great importance in choosing a bank. This is where the maximum number of interactions happen.

2. Core/Basic Banking services provided by the bank

Core banking means the real banking services which are the base services. Facilities like cheque issue, money transfer from one account to another, Demand Drafts, Debit card issue, Interest paid on the account and other core activities. These are the services which have to be there no matter when, other advanced things are not present. These services form 90% of what you need from the bank. Ergo, these banking services are a must.

3. Advanced Banking services provided by the bank

Advanced services are those banking services which are over and above the core banking services. There are the latest technologies which the bank could have adopted. Some of the examples of these are providing IMPS money transfer service, Prepaid recharge and various other such add-on like services. They are “good to have” services, but not must have services. In this era of technology, it’s a prudent thing to have a bank which offers these kinds of services.

4. Online Facilities provided by the bank

The face of banking is changing, A lot of bank customers have totally shifted to online services. Its only the in the worst case scenarios that one visits the bank physically. Else, everything is done online . So do go look at the bank’s online facilities. For example, when I needed a Demand Draft for some purpose, all I did was to put a request to create the DD in my ICICI Bank through net banking and opted to collect it from the branch in next 2-3 days. I got a notification on sms and on email when the DD was ready and I could go collect it anytime. So the next time I passed by my bank, it took me just 10 min to collect it. No time wasted! There was also an option to get it delivered at my home at nominal charge. Its generally said that HDFC Netbanking and ICICI Netbanking is one of the best among banks in India. Things like these matter a lot in today’s fast paced world where you dont have much time to go to bank physically.

5. Transparency maintained by the bank

This is a crucial aspect. How transparent is your bank to you when it comes to charges, facilities, penalties and the offers it gives you on some services? Is your bank too opaque? Does it make life easy for you or tough? One simple example that comes to mind is regarding opening of a PPF account in SBI. There have been so many instances where the SBI bank officials have not been very transparent regarding the rules. Then there was one instance where Axis bank was not very transparent to one of our readers when taking a home loan and actually sold him a policy without his permission. So it really is a big parameter to look at, in a bank.

6. Overall Attitude of the bank towards its customers

And finally, at the end of the day, you have to look at your bank attitude towards you as customer. Does it really treat you as king or trash? How do you get treated when you walk inside the bank? How are you treated on phone with customer care? Does you bank understand that your time is precious and tries to help you, or just looks at you as just another target?

Which is the best bank in India & their rankings ?

In the survey, we had asked from people the 3 things

  • Name of their bank
  • How old is their banking relationship
  • How do they rank their bank on these above 6 parameters

Based on the 2418 answers in the survey, we have created the following result table which shows you how well each bank fared on each parameter. We will look at total 25 banks , the top 10 banks in India and then next 15 banks . “Very Bad” equals 1 and “Very good” equals 5 marks.  The table shows the average marks obtained by a particular bank . At some places you can see the green background which shows that the bank was in top 5 position. This is done for top 10 banks and next 15 banks also .

Best Banks in India

Top Indian Banks as per Survey

If you look at the above table, and look at the banks which have got the average of more than 4 marks as total, we get total 14 banks with more than 4 marks. Note that the names are considered as per survey results only and based on real feedback.

  • ICICI Bank
  • HDFC Bank
  • Axis Bank
  • CitiBank
  • IDBI Bank
  • Kotak Bank
  • Corporation Bank
  • Oriental Bank of Commerce
  • Syndicate Bank
  • Andhra Bank
  • Yes Bank
  • Standard Chartered Bank
  • Karnataka Bank
  • HSBC Bank

15 Real life Experiences from Bank Customers

Here are some of the comments made by people on their banks in the survey. I am putting some of them here for you to read.

Rakesh say’s – “I observed that most of the times in ICICI Bank, customers are taken for granted…I dont see it as an attitude problem with the individuals working there…it has happened in many of the branches I visited…Infact their Bank by Phone assistance is more courteous than the actual working class”

Aditya Karnik says – “One of the branch of HDFC Bank in Nashik city was having some issues with system and hence all cash transactions were stopped. Executives at the counter couldn’t give satisfactory answers as to what led to the issue and rudely asked customers to go to some other branch within city to transact. Well I can understand systemic issue but communication could have been better.”

Mahesh says – “Once my mother, aged 50, had gone to Union Bank of India, Chembur Branch for submitting a form for FD and by mistake she had signed below the dotted line. For that one of the lady staff over there humiliated my mother in front of everyone. My mother came home with a teary eye. We were so pissed off by the way they treated such an elderly woman that we shifted our account to another branch. Some one from the bank said that everyone in the bank is fed up of her temperament and irrational behavior.”

Arindam says – “A recent incident occurred when I need my new address to be updated. Normally, Customers are asked to visit the Bank to update all the records (In the year 2012). However, in this case, I was asked to raise a Service Request through online net banking and the issue has been resolved within 24 hours and I have received my current month’s e-statement with the new address. That’s a fabulous support by ICICI Bank.”

Pradeep says – “I asked for Home loan amortization through e-mail. They did not reply. After 2-3 e-mails, I wrote a strong e-mail to DGM and then got a reply from SBI. Most staff do not know simple rules and regulation on Home loan prepayment. They are also ignorant of latest decisions. This is terrible.”

Nilufer says – “Whenever we need to contact the servicing branch of HDFC Bank, their numbers are connected to the customer care numbers, where 8 out of 10 times there is only a machine talking to you.. There is no one in person who one can talk to about an urgent query.. this pisses me off no end… At-last i had to call one of my previous contacts (who has now got transferred from my branch) on his cell, to get the info on my query. In an emergency, only a machine talking to you, is no 24×7 service which these banks claim to give.. Forget after office hours, even during office hours we dont get a human being taking care of us on those lines.. atlast i had to call the branch manager on his cell to get things sorted out… pathetic customer care service where only a machine is left to service its customers with that no ending options that it keeps blabbing out…” 

Subradas says – “Whenever I talk to bank officials they try to bullie. Either they knowingly do it or because of their ignorance but they do it. They try to bluff at the first go. It seems that Kotak Bank has recruited the worst manpower of the industry. They have tried to shift/do most of the work on back end making the process time consuming. They have delegated hardly any power to their executives sitting in the branch. To close an account it may take 7 days to more than a month where as it takes less than an hour in most of the PSU banks.”

Devendra says – “While my son was proceeding to the United States for higher education, I wanted a certificate from SBI that i could meet more than Rs. 8 lakhs for his studies. Since I was earning more than this amount and also had money in my account, I thought it was quite easy task. Yet the bank refused to issue the  certificate. I then approached Corporation Bank and got the certificate.”

Sumit says – “They had called me to give free Financial Planning advice from a CFP. The fixed a time for meeting and the adviser did not appeared on that day. I did not expected this from a bank like HDFC. Post that, there has been few more appointments taken and shuffled and I haven’t met any adviser yet. (incident took 1 month back.)”

Rahul says – “I wanted to prepay the Education loan taken from Andhra bank, Howrah branch. I had to travel to the branch more than 10 times to get my loan account closed even after making the full payment. The total process took me over 3 months.On the last day, i sent my brother with an authorized letter to collect the hypothetical LIC policies. They confirmed earlier that they would deliver it to him but denied on the spot. Ultimately, i had to rush to the bank in high fever to get those documents. I literally scolded them at this behavior. Another big dismay was the interest rebate- The loan policy document mentioned that a 50 bps rebate in overall interest would be allowed if interest payments are regular. To regularize interest payments, i opened another savings a/c in the bank through which they can collect interest payments every month.

I also gave written application for direct debit from my savings a/c to loan a/c and ensured that there was adequate balance in the savings a/c at all times. Yet, i was not given any rebate in interest. As mentioned earlier, i had to scold them on the last day- you can easily understand the scene at that point of time. I preferred to get the a/c closed asap irrespective of the interest rebate. Meanwhile the banks Branch manager and Loan dept. staff was changed twice and the position remained empty for more than 6 months.

Anand says – “I required a locker, hence requested my Banker (BOB) for the same which they ensured to allot as soon as they get any vacancy. Within a few days i got a call from them confirming the availability of the locker and asked me to come to Bank for fulfilling the formalities and accordingly allotted me the same forthwith.I was really happy with their promptness.”

Gopal says – “Citibank gives you update almost immediately regarding the tranactions taking place in your bank account. Once my cheque was dishonored due to the year I placed on the cheque. The concerned branch immediately called me and I made the payment to the party by other channel.”

Ravindra says – “Several years ago, the then Manager of the IDBI Bank branch, where I have my account was habitually rude with his staff. He used to rebuke them within the hearing of customers. Naturally, this caused us considerable discomfort, as would have to deal with these staff within minutes after being forced to overhear the unpleasantness. I sent an email to the then MD, who sent a senior officer to enquire into the issue. The Manager was more discreet after that, and the staff worked better when the stress and tension was reduced.”

Ramprasad says – “Karnataka Bank is a good bank, but their customer service at the branch level or over phone is among the worst. I had a problem with using the Internet Banking Service and had to reapply for the passwords but even after i was charged Rs50 for internet banking password re-issuance the passwords never reached me or the bank branch. They told me to reapply once again, and the branch was very non-cooperative in their service including the branch manager.”

Karthik says – “Most of the times I didn’t have to approach their customer care. The times I had to, they were extremely courteous and quick in resolution. My first card was rejected because I didn’t have a CIBIL score then, having come fresh out of college. I was able to speak and reason with their Regional Manager, Credit and get my application application approved. Very progressive and sensible rules! at CitiBank”

Conclusion and Disclaimer

The above survey will help you take a better decision in choosing the best bank for your banking needs. Note that the above survey was taken by 2418 people who are the readers of this blog. This survey only represents the net savvy population of the country and it should not be taken as a representation of the whole country. The views of people outside this blog might clash with the findings of this survey. Also the above survey only focuses on the banking aspects and not things like home loan, personal loan etc.

Here’s a crucial aspect of the survey you need to understand. The above results are average of many views, hence its natural that there are many bad experiences with the banks which are considered best in the category and there can be many good experiences for those banks which are not part of these top banks in India.

We are soon going to add a full video course on banking in our jagoinvestor wealth club. Incase you feel you need to understand banking terms and terminologies, you should join the club.

What do you think about this survey? Do you agree with the results or not? Was it useful for you ? Do you feel that yours is the best bank in India ?

Jagoinvestor Wealth Club Starts today- India’s first online wealth club

Posted on by Jagoinvestor

Would you like to be a part of committed investors community to create more wealth? Would you like to be a part of structure that helps you live a good financial life? Why not join us to help you provide a structure that makes you a better Investor. For good health we go to health club. similarly to live a good financial life we have created  Wealth Club. We get numerous mails from people asking, ”Hey what is this Wealth club all about? ”. The wait is finally over, as the coolest club is now OPEN to SERVE you as an investor.

The whole Idea behind creating this Jagoinvestor Wealth Club

We strongly feel that every investor is blessed to live a good financial life. This club is for committed investors. It will help investors to add different dimensions to their financial life.  We see wealth club as a movement that will inspire people in living a good financial life. The wealth club is designed to  provide you with an environment that supports investors in their financial life. After all the blogging, financial planning, writing and coaching hundreds of people, we see personal finance as an ongoing journey and every investor somewhere needs a structure or an environment where he feels safe, enjoys learning about personal finance and gets constant empowerment to STAY in action.

The BIG idea behind creating this wealth club is to help you build muscle to  live a good financial life. Some time back , we ran a survey trying to find out how people feel about their financial life and here are some findings !

  • 90% people need some safe space or structure where they can learn, study and think about their financial future
  • 91% people would like to have access to online library, where they can get quality audio/video’s on personal finance
  • 90% people would like to be part of a committed investors community
  • 87% would like to get in control of their financial life with or without financial plan
  • 92% people feel that if they get personal finance calculators/tools/templates, they will become a better investor
  • 81% people are afraid of misselling
  • 78% people say they dont understand complex financial products
  • 83% people are not able to trust people easily for making investment.
  • 72% peopel feel they read a lot on personal finance BUT unable to implement
  • 64% people feel paying a high fees every year to some advisor is constraint for them

With these points in mind, we have designed wealth club which will provide  a safe environment where investors learn, grow and enjoy the process of wealth creation. You can get a feel about this Wealth club by seeing following video

Here are some of the testimonials from the few set of people who have been using it from last 2-3 weeks. May be you can get a better understanding from their testimonials.

Testimonial from Aparna 

Jagoinvestor Wealth club is an eye opener. The wealth club is easy to access. The courses available on the club are very informative and thought provoking. After listening to each coaching conversation, there are a couple of action items that I make note of and take actions. The conversation is not just about the financial life. The conversations actually enhance our way of living and financial life is just one part of it. There are a couple of calculators which are very easy to use and very useful. For example: the goal planning calculator. This calculator can be used throughout our life to keep track of our financial life, since financial planning is not a one-time activity.

There are a couple of ebooks also. These teaches and reinforces the financial concepts. And moreover, if we plan to invest our money via mutual funds, there is a ready reckoner list which helps us to make informed investment decisions. I did not have to scratch my head to find out the best mutual fund for my requirements. In one of the audio course, Nandish says “Personal finance is about getting things done”. What a powerful statement!!! This website provokes us to take action and be on our toes always…  Thanks Nandish for such a wonderful club

Testimonial from Lavanya

We find it a very useful single place for all information related to personal finance more importantly in a very good structure. I find all the categories useful, especially engrossed now in the courses and conversations. Having gone through some of the conversations with Nandish in past, We find it very useful to refresh memory and there are new topics too. Of course now getting used to this, I want more detailed conversations on some of the topics. The courses too are a very useful feature and done in a very simple easy to understand format. I am certainly using it and expecting the content and categories to increase in breadth and depth. Great start and keep giving us more. 

Testimonial from Jassi/Priya

I think this is one of the most innovative ideas a financial institution like yours can have. A club exclusively for members can go a long way in keeping an individual connected with his/her financial life. The most important aspect of being wealthy is to be consistent and disciplined. Individuals can have excellent plans but they can succeed only if there is regular drive and actions. This club is a brilliant way to always stay connected and be motivated to taking actions, learning and getting closer to goals. Since, it is a club of like minded individuals; it could be a good platform to learn from other’s experiences and always stay in touch with the core principles of financial success. This surely is a very good chance to create many wealthier satisfied individuals in the future to come. Content-wise, We are very pleased to see good coaching courses and teachings of finances. Looking forward to much more content in the wealth club.

Testimonial from Arvind

I was promised 1 yr membership to Jagoinvestor Wealth Club as part of financial planning service in past. From that day I was waiting for this Jagoinvestor Wealth Club and finally I registered and listened all the audio clips (Conversations) and seen Video Clips (Courses).  I found that these are much more powerful than that of Jagoinvestor blogs. The difference in Jagoinvestor blogs and Jagoinvestor Wealth Club is something in the way that, In Jagoinvestor articles you have to realize, you have to read, it is time consuming and in Jagoinvestor Wealth Club you can view videos, you can listen various conversations, so I found it is more powerful. And the content is totally different and well structured. I wish all the best to Jagoinvestor team for the success of Jagoinvestor Wealth Club.
Are you ready to Join the Club and be Part of it

We really invite each one of you to be a part of our initiative. Let’s learn and grow together and get committed to producing a lot of wealth in life. This is an inner circle where we will serve you with our full energy and efforts. We promise to deliver our best creations to you each month and help you grow and design your financial life.

Please share in comments section, what do you feel about this initiative .

8 things I learned by quitting my full time job

Posted on by Jagoinvestor

Haven’t we all faced this at one time or the other? The pain of staying in your job getting worse than the pain of leaving your job ? If the answer is yes, this article is for you.

I am writing this article after Sunil asked a related question on leaving a job and starting a business on his own in our questions and answers forum. He wanted to discuss few things before he can start a business by quitting his day job.

Hello Guys,

Looking at the market conditions in Indian IT Market, it is obvious that anything can happen at any given point of time… I have interest from starting to set up a business (small scale) and have a cushion to my career…. I need few ideas from learned people like you in starting up a business (with at least 3-4 lacs).

I would really appreciate your feedback and comments.

In this article, we will discuss a few things about leaving a regular job and starting on your own,  developing  business idea which you’ve had from long time.

Why this topic on a personal finance blog ?

Truly speaking, this is related to your financial life. A lot of people have extra ordinary aspirations and desires in life. They want to travel around the world, they want to own millions and want to have an ability to spend whatever amount they want on anything in life, but deep down they know, that it would not be easy to achieve everything they want from a regular 9-5 job.

A lot of people get into a job which they feel would be suitable for them, only to realize it later only after few years, that they have made such a big mistake in their life. But we have so much to accomplish , children education , their future, the desire and pressure to give them the best in life, parents , spouse , their dreams and their wants in life.

People who are not happy at their job, they just bury themselves under responsibilities and for entire life, keep on dragging in their current profession and job. However this not a story of everyone, a lot of people love their jobs and are really content and satisfied with what they are doing.

I had recently done a survey on how people are frustrated in their current work and some more information. Here are the full results. please go through it and look how do you fit in there.

 

What about those who are not satisfied in their jobs and career? I had earlier written that your financial life is directly related to your career . If you are not doing great in your career, it will impact your earnings, and hence directly impact your financial goals and the wealth you will generate in life.

So you need to decide if you want to move on and do something on your own as soon as possible, be it  for emotional satisfaction or more monitory satisfaction. Unless you are happy in your work, you cant focus on wealth creation.

My Story of leaving a job and starting on my own

Some people get shock of their life, when they hear that I was a software guy once in my life.

Let me share with you, how I was once a very good student in Computer Science and then became a dull/boring/worthless/unproductive software guy and finally took charge of my career and went on to change my domain to Personal Finance and even wrote a Personal Finance Book (Read 65+ amazing review on flipkart)

 

My Story

I was working in Yahoo at Bangalore in a nice software job, I was considered a good student at my post graduation days but only I know what I was really capable of (like you do) .

I was good at many things like Algorithms, data structures and problem solving skills, but really sucked at others;  Networks, Operating Systems and System related things. Somehow I managed to muddled through, but I still don’t understand them even today 🙂

Yahoo hired me (thanks to them) for the job which demanded exactly all those things out of me, which in my wildest dreams I never wanted to work on. I was devastated and saw my end in the first month of my job. But I had to continue the job, because of my financial commitments.

Each day the expectations in my job grew way beyond my performance, and it made sure my guilt and dissatisfaction increase at a compounded rate. I could see clearly that I am working for money only, I was not able to see myself anywhere in next 3-5 yrs, The frustration of going office without any motive and passion was really killing from inside. I was very sure and clear at that point of time, that my affair with software field has come to an end.

I had to take some extreme step.

How Jagoinvestor came into existence

I had always learned things in my life by teaching others. I was good at personal finance from start of my life and always believed it to be such a easy thing and wondered why people complicate it without any reason. This passion of personal finance and love for teaching gave birth to Jagoinvestor.

I was spending my 80% time at office towards Jagoinvestor (10% time went for lunch). Things moved at a really good speed and I was really passionate about what I was doing and loved it. I suddenly realized that this is my passion, this is something I am passionate about, this was something which was not making any money for me at that point of time, but I could have paid to do it myself.

This was something I woke for each day, Jagoinvestor was something I lived for, It was something which negated my stress and frustration as Software engineer. For next 1-2 yrs, It got bigger and bigger and I was known as an expert 🙂

I was a trusted person on personal finance which was not my field by education, but I was not even considered for something related to software field even though my education and career was based on that. I never cared.

Leaving Job

I and Nandish met in between and we could see how we both could take it to next level. By the end of 3.5 yrs at Yahoo, we were generating some money from Jagoinvestor, but it was not consistent. I knew it can never be consistent flow of money in business, at least in starting years.

I gathered my courage and the belief that we will succeed. I owe so much to Nandish who motivated me and coached me on this aspect, which helped in decision making of quitting my job.

It was not easy ! I had spent so much time and (little) effort in computer science, My parents had put lot of struggle and money on it, and after all I had spent 3 yrs on Computer Science, how could it go for a waste ? How could I leave a well paying job which everybody dreams of and become a blogger ? What will my relatives think , What will my own family think ? What will my future-in-law’s think (SE vs Blogger) .

There was pressure – but I was sure I was not a pressure cooker, I knew I could not risk my entire life. There was not a perfect moment to “quit my job” and I knew there will never be, on the last day of 2010, just few months before my marriage, I left my job and took the next bus to Pune from Bangalore to start the new year and new journey in life, without thinking much what’s ahead.

There were thoughts like “Am I making a right decision ?” , “Will it really be the way I am thinking?” etc , but I also knew deep down that, if I don’t do it now, it would never happen.

Now, after a year and a half  of leaving my job, I can say not even a single day have I remembered or missed my job (except the unlimited sweets and the rasam-rice), though I loved the company. Each day has been a wait to open my laptop and enjoy writing articles and help people in their queries. My Work life is now 100 times better than what it was before leaving the job.

That’s my short story 🙂

So whats next ?

You don’t always have to build  a multi-million dollar start up or create an empire! If you are not happy in your current job, then you just need to move to some other sector or start some business.

Nandish always says that people are so much attached to their current job that they believe that’s their destiny and life now. They don’t even get a thought that their purpose of life might be something else, if they are good at their current job, there might be something where you are awesome .

Just because you didn’t accidentally got into some profession or some company does not mean it owns you or your entire career. You can still move . If you were asked that you will never be able to work in the same sector/profession again because “god” has ordered it , what would be the next thing you will fit in ? What will interest you and you might want to give it a try (share with us)

 

 

8 things I learned by quitting my full time job

Based on my little experience and whatever I had learnt from others, here are some of the sharing for someone who is considering to leave a job and start on his own. These tips are not extra ordinary tips, they are more of a reminder to you rather than teaching something.

If you consider all these points in your planning, then the chances of getting successful would increase. Neither of the below points are perfect, nor it will be applicable to every one. These are just some observations from my side.

1. Start the background work now

Most of the people wait for the last moment till things get ugly and each day is a nightmare at job. If you are very clear that you want to head out on your own someday, start the background work right now in this moment.

Whatever you want to do, learn the game of that while you are in job, start understanding dynamics of the business you want to get into, now. The job to business transition is really a tough thing to do. It takes time, it takes effort, it takes dedication.

2. See if you can do something parallelly

It’s not always possible, but if there is any way you can run your business or start something on the side, it would really increase your confidence.

The chances of this happening is higher, if you can find a right business partner. For most of the people who work in big companies, the best thing could be to talk about it with few friends in the office group itself, who also share same kind of vision and passion. 

Here is a sharing from a jagoinvestor reader on how he worked with his colleague’s after office hours and successfully started his own company soon despite having a home loan and kids to feed

Me and my friend developers who have high passion on starting up a company, we both are married and both have kids of less than 1 yr. We worked after office hours to make the setup and finally we started our company this new year officially quitting.

We made a huge savings to run for next whole year in the same life style and to pay home loans. If we have not taken home loan we would have jumped a little earlier, how ever I see it in a positive way, it keeps us pushing like a fire under belly, we have to do that little extra and that deadline of payments are always there and a huge sum I have taken two house loans including one in joint .

3. Create the buffer

One of the biggest deterrent for starting on your own is “what if things go wrong” kind of questions. This happens mostly if you are weak on your buffer amount. The buffer is nothing, but your emergency fund, in-case things don’t work out for initial few months or 1-2 yrs . It should pay for your basic expenses at-least, if not luxuries.

The larger a buffer you can create, the better it is and it will happen only if you start now at this moment, otherwise not. I would say a 3 yrs buffer is a good number, but most of the people are ok with 1 yr buffer too. If your current expenses are 40,000 per month, you would need 5 lacs per year (40,000 X 12) is what you need for 1 yr and 15 lacs as your 3 yrs buffer.

See how you can generate 5 lacs as first milestone and then 15 lacs. Note that your buffer is inversely proportional to your confidence and how ready you are for your new venture, and a direct function of how ready you are overall.

4. Double income will help

Software guys have this advantage like no one else, a lot of them are DINKS (double income no kids), husband and wife both are earning good money. This situation is ideal for those who want to give it a try. While one person can earn and make sure things are on track, the other person can give his/her shot on entrepreneurship.

If things go wrong, you still have something to fall back upon. I see this situation as “one is earning the money and the other is burning the money”, but at the end it’s more easy than a single earner case. So now if you are about to get married and want to leave a job and start on your own in next few years, you know you will have to give more preference to someone who is earning money. That’s a choice you need to make.

5. Get rid of liabilities

If you already have some kind of liability, like a home loan, it really becomes a pain to even think about leaving a job. You might have to postpone your decision, but don’t bury it . Yes, you have a liability, but once you complete that liability you will have your own home, & that would be a great support mentally. You know in the worst case you have something to fall back on.

Also another advantage would be that once you complete your home loan, you will have one expense less (rent) to pay in life and as you still have many years left to take the jump, its an ideal situation to plan. When you know there are many years in job, you can give your maximum time in planning, getting ready and if possible “increase” the size of your buffer!

6. Imagine the worst case and find ways to deal with it 

This is the biggest reason why most people do not budge from their jobs and keep dragging. The worst case scenario really scares them to death. In the book  How to stop worrying and Start living, the author Dale Carnegie says that one can reduce the worry by mentally accepting the whole worst case scenario, and really write it down and then see what will be his actions at that point of time.

Imagine you are a software guy. What is the worst case which can happen if you take a calculated risk of leaving the job and starting something on your own after lot of planning? 

This is what I can think of – You will blow all your buffer you have created, your venture will not work out and you will lose some months or years – what next?  Worst case, you will have to get back to a job. It will be tough, you will face difficulty to get back to the same level of salary. In worst case, you will start lower than what you earn today, but that’s what is the cost you will have to pay for the desire of starting on your own.

7.  Don’t quit the job !

Just because you are reading this article does not mean you start feeling that you also want to leave your job and start your own venture. No ! .. We are just talking about those, who are “dragging” , they are unsatisfied with their jobs and want to do something else in life.

Its perfectly fine if you are just in your job and move on with the same thing for life. A quite lot of people really excel at their work and earn really big bucks, its all about your love for the work and how far you can go with it, you can always move to next job, go abroad and earn more money.

So not quitting a job is also an option. You need to think about it, evaluate the pain and pleasure attached to both the options and choose what you want to do. There is nothing right or wrong decision, its only “your decision”.

8. Make it as a project

When we get on call – Me and Nandish sometimes talk about the concept of Dreams vs Project. You complete your office work because its a Project, you complete your college practicals and exams because it’s a project, and you also prepare and present a presentation at work because its kind of a “project.”

You fail at getting up early in morning and exercise because its a Dream, not a project, you are not able to save enough to pay down-payment of house as planned, because its a Dream, not a project.

In much the same way, most people do not achieve the transition of leaving the job and starting their venture because its a dream, not a project. If you want to understand more about the difference between Dream vs Project, listen to this 12 min’s audio

Idea’s for starting a new venture

A big challenge in leaving the job and starting on your own is “what will be the next venture?” It leaves an open question in many minds and people are not able to take the decision. We can all collectively share some idea’s on what kind of small or big business can be done with small and big capital .

You must have one good idea to share , Please share it will all and I will publish the list of all idea’s on this same article once they start floating.

Real Life Sharing’s about how they feel at current job ?

Experience 1

Following the herd culture ,i.e, after 12th doing engineering and then software job irrespective of one’s branch and now life looks like to be more of a mechanical where everyday you do mundane things and on top of it some crap , foolish and utterly junk lowly intellectual managers govern your appraisal and hike.

I want to get rid of this junk industry where human emotions get dissolved in thin air and people are moving towards making themselves machine oriented trying to achieve efficiency of typical machine with elusive numbers.

Experience 2

I am working with a pvt limited Bank.Though the Bank is employee friendly and has a great future but I feel my vertical is very boring and stagnant.My supervisors are very rude and insult me in front of everyone.My job has no challenge and stagnant.Though my knowledge is better than other colleagues but I am given job of a doc executive.

With no knowledge involve in it.I wanna go 2 other dept.but my supervisors are not allowing me for that.It makes me helpless.My productivity is getting decreases but I ve not lost hope may be in future I ll get a better work related 2 my knowledge.

Experience 3

Not much to share. Not just enjoying my job. Its not satisfying. Its not what I wanted to do in my life. i’m a bank Manager now, but don’t really feel so, being in one of the largest pvt sector banks. There is a lot of gap between what is written in offer letter and what is being offered us to do daily in office.

The number of hours we give to office, is just too much. Usually more than 11 hours a day, all through the year. What I and most of the colleagues believe that, if we give this much dedication and passion to some venture of our own, then we can reach pinnacle of success on our own.

Why should we give so much to another company? Will it give us a justified share of its profit if we give so much to the company. NEVER.

Experience 4

Basically, i am a drummer and interested in the Music domain. By chance or by mistake i have come to this bloody Software Industry, which is full of diplomacy and politics, which is never suited to my type! So planning to be back with my musical nature and rocking mode.

Experience 5

I am a post graduate degree holder in Mechanical Engineering (Research) from IIT Madras . I was chosen by one of the biggest software companies from campus for my employment. I am being employed in the IT outsourcing division. Company recruits were bragging at the time of placement.

I am doing some type of maintenance and enhancement work of some client’s mainframe software which up to a certain extent is challenging due to the analytical and logical skills involved. My current job does not leverage my scientific and mathematical knowledge acquired during my studies and that feeling keeps me dissatisfied in my current job.

I did not take a honest and serious effort in moving out from the situation as I got very much comfortable with the current position and also due to other family commitments. A 2-3 year onsite work opportunity is looming and I am hoping of saving a corpus and proceed for a career change.

Can you relate to the above cases ? Is your story very much on same lines ?

How did you find this article ? Do you think it was valuable for you ? Are you in that situation where you want to leave the job and start something on your own ? Share your experience or views with all of us .

Wife gets 50% share in husband’s property after divorce – India Law

Posted on by Jagoinvestor

Do you love your wife? You better do!

There were few changes proposed weeks back in the marriage laws in India, which everybody should be aware about. A bill called “Marriage Law’s (Amendment) Bill 2010” was passed by the cabinet, which is pending for discussion in Rajya Sabha and some major changes in the women’s rights are suggested, on how the properties would be divided after divorce.

Women Rights in husband property after divorce - India Law

The biggest change says – “As per new Divorce law, Wife share in property would be 50% in all her husband’s residential properties, no matter what and in other properties, her share will be decided as per the court decision.”

Wife share in property owned by the husband would be 50%

Earlier, before this change – a woman was entitled to a share in husband’s properties, but there was no quantum defined as per law, it would be any percentage depending on the case, but now with this suggested change, a women will enjoy equal sharing without any condition in all the residential properties owned by husband. But in this case, women will have to specifically apply for her share, she should be aware of this law about “50% share”.

A major change in this amendment is that this rule is applicable to all the properties of the husband acquired before and after the marriage, whereas the earlier law made sure that the wife gets share only in those properties which are acquired by her husband only after marriage. Now men stand to lose on this front, in-case things are so sour with the wife.

Husband & Wife joint holder’s in a residential property

You should be clear by now, what will happen in the case where a property is registered in the joint names of husband and wife. A lot of couples register a house in joint names, a lot of times both pay’s from their respective salaries, and in some cases, only one party pays (generally husband). Imagine divorce happens – Who will get how much? Women will keep her 50% part and she will also get half of her husband share in the house, so 75% wife and 25% husband.

Rights of women after divorce on other properties in India?

Apart from the mandatory 50% share in husband’s residential properties, the wife will also be entitled to get a share in another kind of properties, but the quantum is not set, as per the Bill, it will depend on “living standard of the wife”

Waiver of six months cooling period possible

As per the old Indian law which governed the division of assets for women after divorce, it was mandatory for husband and wife to spend at least 6 months together before applying for divorce, but with this new amendment bill, there are provisions of waiving off the 6 months cool off period or lessen it, but only if both husband and wife want it. This means if one of the spouses wants to get divorce on an “urgent basis” , but other does not, it will not be possible. This is one of the major change in the bill and will help those couples who do not want to serve that “6 months” cool off period of living together.

Is this an anti-male law?

A lot of groups have termed this change as anti-marriage and anti-male law and critically oppose it, they have termed it as a bill totally against males and illogical. The major issues with the amendment are as follows

  • The bill talks about only the division of Husband Properties, but not wife’s properties. So in-case women are at fault, still, she will get a 50% share in husband property, but her share of the property will not be divided.
  • A major disappointment for men in this bill is that even the “person at fault” can apply for getting the share of property, and the other party will have to respond to it. Generally as per old law’s when mutual consent was not there, the victim applies for the property share and the person who is the “bad person” has to respond to it. Now with his law change, his wife can seek a divorce and ask for a share in the property.
  • There are concerns raised like this law will encourage more divorces are women can get hold of property easily for sure.

Now there are some serious concerns due to these changes. If a husband has one residential property, old parents who are financially dependent on him and there is a divorce between husband and wife, the wife could take 50% share, in which case the men will be left with 50% property, this seems very unjustified. What is the woman already owned 2 more properties on her name? She has nothing to worry about!

One serious drawback of this law is that some men, who are undergoing a bad phase of marriage, may convert their residential properties into immovable assets, or just transfer it on other names to save themselves from parting away with 50% share in the worst case.

Conclusion

While there are cases where women are deprived of their share in wealth at the time of divorce in India and there was a requirement of strong laws which focuses on rights of women in case of divorce in India, this amendment seems to have gone beyond what it wanted and has loopholes which can be exploited by women. With due respect to each gender, it would be great if there would have been some balanced law, and some thought should have gone for the worst cases.

To summarize things, here are the take away’s from the changes made in marriage laws.

  • In the case of divorce, Woman will have 50% share in the residential property of a man
  •  The wife will have to take the initiative of seeking her share in such cases.
  •  Women and children will also have rights in the other assets of man, which will be decided by court
  •  It does not matter if the property was acquired by before or after the marriage

What do you think about this amendment? Do you also feel its too anti-male but only designed keeping women in mind? Do you feel its correct to keep a 50% share for wife in husband’s property in case of divorce as per law in India? Note that the bill still needs to be passed and right now only the cabinet has passed the changes. It is yet to become a law after getting passed in both houses.

Note: The information provided in this article is based on various media articles and the exact circular could not be found out. Also, the bill still needs to be passed, only then it will become an act finally and will be implemented.

Shocking ! – Job Rejection due to Bad CIBIL Report

Posted on by Jagoinvestor

Your credit score is going to affect your Employment. You can face job rejection due to it! Yes – that’s happening already. A lot of companies especially Finance and Software Companies have started asking candidates to present their CIBIL report and score (or any other credit report) at the time of the interview and it has started playing a role while selecting a candidate. So if your credit report is bad because you have not paid your loans on time or if you settled your loans in past, you might get rejected in your next job interview provided your prospective employers look at your cibil report/score. Note that it’s standard practice internationally to check credit score before employment and various other purposes.

Employers looking at cibil report at job interviews

3 Real-Life Example of Job Rejection due to Bad Cibil Report

I am sharing with you 2 real-life example’s where credit report was asked before the interview and they were eventually rejected (there can be other parameters for rejection apart from the bad credit report)

Example #1 – How Sapan has rejected a job in HDFC

Sapan a reader of this blog faced job rejection twice by HDFC Bank and an NBFC just because there was a credit card dispute on his credit report and he could not convince them that it was his fault.

I lost the Job twice in HDFC Bank even after got selected for Relationship Manager but rejected by HR team because of my credit card dispute which was stolen and unauthorized transaction took place of 50000/-. In the end of the day I was failed to convince the HR team and I was forcefully to pay 50000/- and got a job in one of the NBFC which also checked my CIBIL before getting job. – from facebook comments below

Example #2 – Rejection by Indian company for a Bad Credit Report from the US

Even those who are coming from US to India and looking for Jobs, employers are asking their US credit score – Here is an incident which happened with Nandish’s friend, this sharing was from Nandish

He was in US for almost 8 yrs. During that time he created a lot of debt for himself. His job transfer got him back in India, he knew his credit score in US is bad and he never bothered about it as he thought now he will be staying in India. His job was going on well and his life was comfortable. On one fine day he decided to quit his job and started his own business. He could not make it in business, his social responsibilities forced him to get once again in job. He started applying in different companies and finally one Bangalore based company offered him 16-20 lac pay package. He was excited and thrilled to get this offer. This company was US based and one of the most important criteria they would check is their US credit score…My friend tried hard to convince them but finally he was not selected. To improve his US credit score he is now really working hard but nothing seems to be working for him.

Example #3 – How an Indian Bank asked for CIBIL report

One of the readers was asked for her CIBIL report when she applied for a job in an Indian Bank, She applied for CIBIL report and handed over to the bank, the bank has not followed up with her after that.

I have applied for a job in bank and they have to check my CIBIL. I have a loan taken just 2 months back and only one installment hit my a/c thru cheque and tht was honored. Bank want to check my CIBIL before hiring. I haven’t had any bad experience but ya this is first time my CIBIL gonna check… and might be there is some problem according to bank ppl as they have not reverted me after my cibil check.

Quotes from some of the latest articles on media

  • If you thought you had only to worry about banks getting hold of your credit histories, there’s more. Of late, employers too have been asking prospective candidates to submit their Credit Information Report from CIBIL. Your employability could be affected by the report, as it happened with an acquaintance of mine, who was refused employment in a bank because of his poor credit history. Would you rather pay for your mistakes at a later stage in life or plan for those loan EMIs and pay them on time? – source
     
  • Some employers may also ask a potential employee to submit his/her credit report during the hiring process. Those with poor credit scores may be rejected in favor of those who have demonstrated better financial planning. Thus, the credit score and report may become a vital ‘reputation’ collateral even for employment in the future. – Source
  • Companies in western nations are known to make credit checks before taking people on board. In India, companies have started checking the creditworthiness of an individual, especially for senior-level hiring. Employers ask the candidates to produce their credit report at the time of interview because employers cant access it directly.  The trend is picking up in financial and IT sector companies. – said Harshala Chandorkar, senior vice president, consumer relations, Credit Information Bureau (India) Limited (Cibil). – Source 

Why Do Employers want to check your Cibil Report?

If you think for a minute and try to understand it from an employer’s perspective, you will realize that there are some reasons why employers might want to look at your CIBIL report before they hire you. Here are some –

1. It’s part of “background check”

A very valid point can be that checking your credit report or score can be seen as a part of “background check” . While there are genuine reasons why some innocent guy had a bad CIBIL report, a person having a bad CIBIL report can be seen as an irresponsible person and not capable of taking care of things. Just like no company likes to hire someone who has a criminal record, in future even having an extremely bad credit report can be seen in that way.

2. Bad credit record might indicate bad intentions as general

A person having a bad credit report might not be seen as an honest, credible person to work with and he/she might be seen as a potential threat to the work environment. While this is a big debatable topic – look it from employers point of view, they see things in a very defined manner, if the company policy tomorrow says that we will not hire someone with any person whose credit report has a WRITTEN OFF status on a loan, or has a score below 650 , then even those who are innocent and have got a messed up report will feel ask if its unfair, but companies go as per their framework and rules defined, not case to case basis.

3. High debt trap might lead to bad performance

If you have a huge debt on your head, it’s really tough to give your best at work. This is exactly how employers can see it, even though you disagree with it. It has been known that financial issues have a big impact on professional life, you might not concentrate fully if you are in a financial mess and paying off your debt is consistently on your priority list each and every moment.

Bad credit report leads to job rejection in interviews

Is the CIBIL report being checked by all employers and sectors?

As of now, looking at credit reports while the interview is a very new trend seen in India. It’s not widespread, but have started happening. So you can safely assume that it will be a regular process within some months or years. As of now, CIBIL Report is checked at only senior-level interviews especially in Financial and IT sector, but soon this will be happening across sectors and all levels. Employers can not directly access a candidate credit report because RBI guidelines allow credit bureaus to share it only with banks and financial institutions who are clients of CIBIL, hence Employers ask the candidate themselves to present their report when they come for an interview.

Note that credit reports are just one of the parameters being checked by the employers, it’s not the only basis for job rejection. Apart from the credit report, other main and important parameters like job qualification, experience and salary expectations will also matter while hiring, a credit report is just a part of the whole process.

Who else can use Credit Report and Score in coming future?

In an email reply to me, Harshala Chandorkar – Senior Vice President – Consumer Relations of CIBIL shared with me that credit reports can enter our lives in a big way in the future. In future landlords may demand a credit report before renting out an apartment and even telecom providers can see your credit report to assign the limits for your usage, but this can happen in the future, not very soon. Here is what she said in an email reply to me

In more developed economies, an individual’s credit information report and credit score is critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom providers check an applicant’s credit history for assigning limits.

We may see similar evolution in India when a person’s credit report and credit score will be imperative for a lot many things in addition to availing institutionalized credit facilities. Therefore it is very critical for students to maintain a good credit history and pay back the loan dues on time.

Share this information with your friends (you can share it by clicking on the “Share” button on the left side) and let them know about it, they will thank you. Also, let us know – What do you think about this about job rejection due to the CIBIL report? Do you feel it’s going to help us all? Do you think it’s fair to check credit reports by employers in job interviews?

Results of Personal Finance Quiz – with answers

Posted on by Jagoinvestor

I took a personal finance quiz last week, in which close to 1,000 people participated. It was amazing to see the participation and the way you guys took the survey. I am now publishing all the questions with correct answers and the explanation for the answers , along with some observations (results and how different income group, profession performed in it) . Each answer had a 1 mark , so someone who answered 4 right out of 10 , has a score of 4/10 .

Personal Finance Quiz was tough

I did not want to make a simple quiz, so I had designed the questions in such aq way , that the answer which comes to mind immediately was not correct , the right answer was a little hidden one and not easy one . Hence you might see that the answer which naturally came to mind was actually a wrong one , the right answer was a little tricky one.

Some Observations from Personal Finance Quiz

  • The average score of all the quiz takers was 3.48/10 .
  • 94% quiz takers could not score more than 5/10
  • 50 people who were extremely overconfident and said “All 10 questions are correct” , all of them scored below 5 , and the average score was 2.84 out of 10
  • The high income earners were the worst performers with average score of 2.69/10
  • One of the worst performance was from software professionals with average score of 2.91/10
  • Only 27 people were able to score more than 7/10 and just 4 person scored 8/10 . Most of these people had income less than 5 lacs and they thought they had “more than 5 correct answers” , but not all correct.

Answers for the 10 quiz questions

Here are all the 10 questions from the quiz and their answers with explanations. You know what was your answer and hence you can find out what was your score exactly.

1. If you have a bad remark in your cibil report ? What is the maximum tenure it will be there and after that it will be removed ?

Right Answer was There is no upper limit on this . I was sure that a lot of people will choose the answer as “7 yrs”, because they had heard that number “7 yrs” as being the limit after which the bad remark from CIBIL is removed, but its again a myth ! . Yes – you will be shocked to hear this, but 7 yrs is the MINIMUM time-frame for which bad remark will appear, its not maximum. In the question, it was asked for the maximum limit, and right now there is no maximum limit. I was on a phone call with a senior person from CIBIL, and she told me that right now there is no decision on what will be the maximum limit, so on the higher side, the bad remark on CIBIL can be for even 15-20 yrs , you never know , but for sure it will be there for minimum 7 yrs . Now understand that this is when you do not do anything about your Bad remark , if you pay off your outstanding or pending debt , then it will be cleared of, Read this article on how to improve your cibil score and Report

2. CIBIL score is calculated based on past how many years credit history ?

Right Answer was 2 yrs . I was not very surprised when most of the people chose 3 yrs as answer. It must be because they are aware that the CIBIL report contains your last 36 months of history , it has all the data about how much was outstanding and how much you paid. But your credit score is only dependent on past 24 months credit history only, whatever would be the algorithm for calculating the credit score, only past 24 months of data is used.

3. The money you withdraw from your Endowment policy after the 3 yrs lock in period is Tax Free 

Right answer is True.  As per the revised rule, any surrender value from Endowment plans are tax free after 3 yrs, but earliar it was 5 yrs, now its changed  (This answer was updated later)

4. If EMI for 20 yrs – EMI for 25 yrs = EMI for 25 yrs – EMI for X yrs , what is X

Right answer is None of the above . The other 3 options was not a right answer because X will depend on the interest rate value, If the interest rate is a number which is like 10% or something , then the X value will be infinite, but X can actually be 100 yrs or 200 yrs , if interest rate is very small like 3-5% (test your self), hence the answer is it purely depends on the interest rate. You can check this using the this EMI Calculator .

5. Ajay bought a house in Nov 2011 and paid stamp duty of Rs 50,000. Now its June 2012, and his friend recently told him that stamp duty can be claimed under sec 80C. How much of Stamp duty out of 50,000 paid can be claim now ?

Right Answer – He can not claim Stamp Duty Under 80C now . The simple rule is that Stamp duty can be claimed under 80C, only in the financial year its paid.  If you see the question clearly, then you will see that Ajay bought the house in Nov 2011 (that’s 2011-2012) , hence the 80C benefit for stamp duty can be claimed only for 2011-2012 . But the question says that now its June 2012 when Ajay’s friend tells him about the stamp duty thing , now the time has passed, he cant claim it back now .

6. Father creates a Fixed Deposit on his child name for Rs 10,000 @10% interest rate. Next year who will pay the tax on the interest amount of Rs 1,000 , if child has no other income source

Right answer – No one will pay income tax . I was sure people will confuse this with the income tax clubbing rules, which says that income of minor will be clubbed with the parent who actually invested the money, but here if you see the income for the year is Rs 1,000 which is from the Fixed Deposit on child name, and what many people might not be aware is that, as per section 10(32), income upto 1,500 per child is exempted from income tax clubbing . Only income above Rs 1,500 will be clubbed, which means that a person can make FD’s on their child name and interest upto 1500 will be treated as purely child income and no tax will be paid on that. This is one of the tip you can use to save small tax on the income from investments .

7. Ajay’s age is 25 yrs right now , His birthday is coming next month, but he will not be able to take his term plan before 3 months, Why should he worry ! 

Right answer was There is nothing to worry about . Its because Life Insurance calculations considers the “nearest” birth date, not the next or previous one. So in this case Ajay’s birthday was coming next month, so whether he takes a term plan before 2 months of his birthday or after 2 months, it does not matter, his premium will be same, because his age will be considered as same. Now this has become a standard way of calculating the age, but there might be 1-2 insurers who are still calculating it on the completed age.

8. Ajay sold his land after 9 yrs, but still suffered a capital loss of Rs 8 lacs, In order to save the tax on that, Ajay had also bought some shares 2 months back which have appreciate a lot . He sold them at a profit of Rs 3 lacs, Which option is correct now?

Right Answer was Ajay can carry forward 8 lacs of capital gains loss for next 8 yrs . The first point is that a capital loss can be forwarded for next 8 yrs, not 6 yrs. The other point is that most of the people must have offset the 8 lacs long term capital loss with 3 lacs of short term capital gain, and thought that he can forward only 5 lacs of capital loss, but they forgot that a Long term capital gain loss can not be adjusted against Short term capital gain (a short term capital loss can be adjusted against both short/long term capital gain) . Hence he can fully carry forward total 8 lacs of capital loss for next 8 yrs.

9. You can file an RTI and get information in respect to ?

Right Answer – Both SBI and PPF . All the govt departments comes under RTI act . As PPF comes under Post Office (Govt of India undertaking) and SBI Bank (a govt bank), both come under RTI , and in the same way all the PSU banks like Bank of Baroda , Canara Bank, Bank of Maharashtra etc also come under RTI , in-case you are facing any issues which you wants answered, you can file an RTI application and get your queries answered. Look at this example of how can file RTI for your EPF (Employee provident Fund) queries.

10 Ajay family consists of Brother, Wife and Mother. Ajay holds a Demat account (nominee is brother) and a Joint bank account with wife (nominee is mother) . Now Ajay and his brother both died in an accident , Ajay had not written any WILL . Which of the following is true ?

Right Answer is Demat will be claimed by Mother & Wife, but Bank account will be claimed by Wife Only. It was simple, but confusing. When a nominee dies, its as good as no nominee. Hence The demat account will be considered to have no nominee, which means the hindu succession law will apply in this case as there is no written will, and the demat account will be equally claimed by Wife and Mother (both class 1) . However the bank account will just go to wife because its a joint account, hence the second holder reserves full right on the bank account after primary holder death, the nomination or WILL has nothing to do here, because nominee and Will comes into picture only after both the holders death.

Prize for Top winner of Jagoinvestor Wealth Club

Out of the 4 people who scored 8 , We are picking one random winner , who is Mr. Rajasekaran, and we would like to offer him 1 yr free membership of upcoming Jagoinvestor Wealth Club, which is a paid product . Not disclosing much on what it is exactly, wait for it ! .

How do you feel now

Truely speaking, the personal finance quiz turned out to be very good and I really enjoyed it . You must have see how you quickly answered few questions and got them wrong, you must have spent some time to read them carefully :). This quiz was also designed so that you can see yourself that where you stand when it comes to personal finance and understanding the internals of it. Would love to hear how you feel after knowing the answers, do you feel you were overconfident with your knowledge ? Do you have any confusion in the answers of these personal finance quiz questions and would like to understand more ? Please leave your comments .

Personal Finance Quiz to test your Knowledge – 10 questions

Posted on by Jagoinvestor

How much do you understand personal finance? You must be reading this blog from last many months or years, now let’s see how much you know. We have designed this short 10 question personal finance quiz to see your knowledge. Just answer these 10 questions and pick and answer from the drop-down. I will post the answers and scores very soon. Please write your full name when you enter your answers.

The quiz is over and Results are declared here

Direct link to Quiz here

Charity Week – Break your Attachment with Money

Posted on by Jagoinvestor

We are all living in a world where we are conditioned and functioned to GET than to GIVE. Since childhood, I have been trained to focus more on getting than on giving. Getting good grades, getting admission in a good college, getting good placements, getting awards and getting good salary packages.

Charity in India

We had some realization that we would like to share with each one of you. We saw that the other side of getting is GIVING. The world of giving is much more magical than the world of getting and with this charity week, we would like each reader of Jagoinvestor to get in touch with the magic of GIVING. Tell me honestly, why do you get on Jagoinvestor – to get or to give? I am not saying getting is bad, it is important to givers so that they will have more to GIVE more. Some of you really take out time to forward good personal finance articles to your friends even if you know they wont read because you care for them.

Let’s not get stuck in the rat-race because even if we win, we will end up as a RAT. We are not saying become a saint, all we want to point out is that, as an investor you are much more than your bank balance, you are much more than your investment portfolio and the returns that you get. We want you to realize how wealthy you are in this moment.

ROI of your Life

With Charity Week, we want you to get in touch with the ROI you are going to get from YOUR LIFE and not just from your money. A Go-giver will always have highest ROI from his life because he is more of a contributor than a consumer. You experience life at its peak when you are a giver and not a taker. Three messages we learn t and we would like you to learn from Charity Week are:

1. Connect with power of Giving

I was really touched and moved when Manish shared this experience with me. Manish and his wife were traveling from Pune to Mumbai. When the bus got on expressway, the conductor found one villager in the bus who was not having money to buy the ticket. It seemed as if he has got into a wrong bus by mistake. As per the rules the conductor asked that person to get down from the bus. Everyone in the bus was watching what was going on and in that moment Manish and his wife decided to talk to the conductor. They told the conductor that whatever is the fair we will pay but allow this person to travel, don’t drop him on such lonely highway. Manish and his wife paid for that person’s ticket and conductor finally allowed that villager to travel. That villager’s eyes got wet and it carried immense acknowledgement for Manish and his wife. In that moment, Manish experienced some magic and that is the magic we want each one of you to get in touch with. When you a giver you operate from service and help someone.

The big lesson here is – “It takes an open heart to help someone and not a lot of money”

2. Wealth isn’t the end, it’s the beginning

One thing that we have realized is that wealth is not an end but it is always a beginning. I have a small garden in my backyard and I invest (notice I don’t spend time I invest my time) some time every day to be with nature. Any garden is initially a patch of land and then you plant a seed or a sapling, we start to give that seed all the Wealth of water, Wealth of fertile land and Wealth of sunlight, that is how the sapling or seed starts to grow and on one fine day, it starts to give flowers and fruits. The fruits and flowers blooming is not the wealth, the wealth happened in the beginning. As an investor you also need to get in touch with the wealth you start as an investor. You always have wealth of actions, wealth of time, wealth of ideas, wealth of dreams, wealth of people and blogs that can help you understand about money. Your job as an investor is to nurture your financial life with the wealth you BEGIN with.

The big lesson here – Wealth is not the end. It is always the beginning

3. Break your attachment with money

We wanted to do this charity week long back but at that time I was not making any donations. My attachment with money was massive; I was focusing more on what I can get rather than what I can give. The world of giving is always a world of abundance. One of the things we have realized is that even if you take away abundance from abundance it still remains abundant. I never use to give money to any needy person thinking these people don’t work hard and we should not encourage such things. I never gave money to any charitable organizations thinking my money will get misused.

I had some realization some time back. My father took me to a GAUSHALA (A Cowpen). I liked the place, I also had some interaction with the person who was managing that place, he shared with me how people donate and contribute with an open heart. He was full of love and service and he had no expectations from me or from anyone. In that Cowpen you can adopt a cow with some annual fees. Something happened to me in that space and my attachment with money broke. I made maximum donation I could on that day and it was a very fulfilling experience. From that day I am looking for opportunities where I can help or serve someone.

The big lesson here : Giving is one of the easiest, most difficult things you will ever do.

I and Manish always discuss that no matter what your salary is or which mutual funds you invest or how much gold you acquire, unless you break your attachment with money you will never become wealthy.

What some Charity Week Hero’s did in this Charity Week

See what Sam did

These days, we are so attached to the money that we hardly care about people in need. Couple of years back, one day i went to a small railway station near my house in Bangalore for a morning walk. (It has a long and nice platform ;-) ). After a while i sat on a bench, a train came. I was observing the people and its amazing that these people get up so early in the morning , travel so long to do their jobs & I don’t think they get huge salaries. At that moment i realised how lucky i am, that i have a good job, i can earn money by working on a computer. I also realised that i am in a position to help many people in need. Since then i started very small donations to couple of organizations, and also i came across a micro finance NGO – http://www.rangde.org where we can lend the money to poor people who wanna do small business. I am a regular investor in Rangde.

See what Sainath did

I like Akshya Patra and contribute for the outstanding service they are offering. To come up in life education is necessary. But what good the education is if we dont have lunch during school hours. How will we digest the knowledge without having proper food. Akshaya Patra provides lunch to loads os school students which i think is a very good initiative. I totally support them and will spread their work to all.

See what Suhas has done

I have right away donated Rs 4200/- for child education through net banking to smile foundation India. I wanted to do this since some time but got the timing today with your donation week. I storongly belive that only education can uplift this country from all the mess we are in. Thanks for bringing up the topic. and offcourse it feels gr8……:)) Keep up the good work………

See what Aparna did

Recently, we had been to Shimoga (a place near Bangalore) to a temple. There are around 23 boys who are sponsored by the temple committee. When we saw the boys, we went ahead and donated money so that these boys get good food to eat atleast once in a year. We are also planning to donate some money in the next year for the same cause. Also, recently, we donated around Rs. 17,000 to a boy who wanted to complete his education. We donate atleast Rs. 20,000 yearly. Its our routine :)

See What Sushil did

I have been donating Rs.300 to UNICEF children’s fund every month. I was shocked to hear this would help 120 newborns for polio medication. And Rs.1200 would take care of a child’s expenses. Yes, our petty amounts make HUGE differences somewhere!. It also has other donation campaigns, where u can donate any amount you wish to give every month. I am increasing it sooner :) . In my hometown (Siruguppa) in Bellary district, Karnataka, I know a doctor who goes to villages teaching Dos and Donts, giving them free medication, helping them on monthly visits. I wish to donate some amount to his foundation soon.

See What Rajendra did

When you give without any expectation you get more. We experienced this when Rs 20400 has passed through our hands to reach Maaillu which takes care of 180 children who don’t have parents(www.maaillu.org) It is foolishness to feel that it is a donation- God gave us that great opportunity. We earned that money by doing another good work of helping others with the only intention of passing it to Maa illu. That extra work gave us real satisfaction than the giving, (giving became our duty). I feel that writing about charity is also the duty of you. I always remember the words of Infosys Narayana Murthy ‘ Power of money is power of charity’. As he said, We have to earn to give it away.

Our invitation to you in this Charity Week

We invite you to hear your call. Join the charity week with the most loving heart and do some charity in any organization of your choice. Make this week special make it an integral part of your life. It’s time to think beyond numbers, financial products and calculations. We want you to fix your life’s calculation first and the rest will happen on its own. In this week be of service to people around you, fill yourselves with a lot of love and help everyone around you. Do something special for all those who are serving you and you never ever noticed them! Be it your liftmen, your security guard, your office person, your helper at home, or just help some poor people

Fill the comments section with heartfelt experiences and sharing, let the goodness in you come out. Let’s master the art of giving. This kind of charity may have never happened on blog, lets create a world that works for everyone, let’s contribute and be of service to everyone around us. Make this charity week a piece of your heart and enjoy the wealth called ‘LIFE’.

Here is how you can make a start, following are few organisations where you can make a donation

Rs 1,75,000 already donated by 32 readers

We are close to thousands of readers on this blog , even if 10,000 people donate even Rs 500 , it would be close to Rs 50 lacs worth of help to someone. Think about it – do your bit .

Here is the form where you can submit your donation details so that we can measure as a blog how much money we donated and what difference we created in the world. If you are already doing charity share your experience in the comments section. Only the money that you will be donating in this week will be counted.

Just donate some money and let some money go out of your pocket for someone else. You will experience a very different kind of feeling which will be great.

Best Credit Card In India – Review of top 6 cards

Posted on by Jagoinvestor

Most of the people who apply for a credit card in India, do not pay much attention at the time of taking the card, but later get frustrated by the card itself for various reasons high bad customer service, hidden charges, and several other factors. The obvious question then is, which is the best credit card in India? We did a survey on credit cards and tried to do a review of credit cards based on participants experiences. We will see how these cards rate in 6 important parameters. There were 654 participants who took the survey, hence you can safely assume that the collective responses will give a near reality results.

Best Credit card in India

If you see the chart above you will know that the 6 top credit cards in India are –

  • HDFC Bank Credit Card
  • ICICI Bank Credit Card
  • CitiBank Credit Card
  • SBI Bank Credit Card
  • Standard Chartered Credit Card
  • HSBC Credit Card

6 factors to look at before you apply for Credit Card In India

Let’s see those 6 parameters which you should look at before you apply for a credit card in India. At the end of this article, we will see the detailed results of the credit card survey and find out how different credit cards performed on each parameter so that if some particular parameter is more important for you, you can just pick a card based on that parameter.

1. The interest rate charged on credit cards

The first parameter to look at while choosing a credit card can be the interest rate charged by the credit card company. It can range from 1.99% on the cheapest credit card to as high as 3.5% per month on the most expensive credit card. For most of the people who pay their bills on time, this parameter will not matter much, but you never know when you might get into a debt trap kind of situation where you start using your credit card to the maximum limit and pay the interest per month, at that point of time this factor will really matter. Note that interest rate charged is mentioned on a per month basis, but a small difference of 1% can be very big, considering it on a yearly basis.

For example, a 1.99% monthly interest rate actually means 27% Yearly and 3.5% monthly means 51% yearly CAGR.

51% yearly CAGR ! … means your Rs 1 lac of credit card debt can actually increase to 7.9 lacs in just 5 yrs if you don’t do something about it and obviously you will run around to improve your CIBIL score later!

2. Annual Fees & Other charges

A lot of credit cards charge yearly fees and renewal fees (at the time of renewal). Now a lot of people hold a Free credit card for lifetime, but that’s just bunch of people who were given the credit card on a telemarketing call, mostly because they are working in some big company and chances are higher that their usage of credit card will be much higher than an average customer, hence the free credit card.

But, a lot of people apply for the credit card themselves and for them, there are yearly charges (annual fees) and another kind of charges which is applicable to everyone. For example, the penalty charges if you don’t pay your dues any due date. There are tons of customers who do not pay their dues on last time and just pay the minimum payment. If this happens a lot with you, then there is a great chance that you also live with the myth of minimum payments on credit cards. So apart from annual charges, there can be charges like

  • Charges when you pay your credit card bill by cash in any bank branch
  • If you make a demand draft from your credit card
  • If you request for a duplicate statement
  • And many other credit card charges .. the list is not a small one 🙂

Note that if your credit card is FREE as of now, it might carry annual charges when it expires and you apply for renewal – and credit card company says – “Sir, we gave it 100% free only till the card is valid, now its renewed! “

3. Rewards and Offers on Credit Card

There are a lot of advantages of using a credit card in the form of benefits and reward points. For example – You get PAYBACK points which you can use to redeem at various places like www.bookmyshow.com, and book movie tickets by redeeming those points. You also get cashback benefits if you use the card at selected HPCL petrol pumps and you don’t pay the fuel surcharge too.

There are many other kinds of benefits that many credit cards in India offer and those can be different from one credit card to another. This is one very important factor before you choose a credit card because a big number of people just take credit cards for these benefits and even if you are not looking for these, you might want it in the future at some point in time.

4. Customer Service and Transparency

Once I called my credit card company (which is ICICI Credit card) because I wanted to know if there will be any annual charges on my credit card as the expiry date is over and I wanted to renew the credit card. They gave me a very clear and satisfactory step by step answer which made me feel – “Great” .

There was no renewal charges and no annual charges even after renewal. So I was happy. Now it was not the FREE thing here which made me happy alone, It was the way customer care talked to me and treated me like a human:).

While there are instances when I was not that happy, but overall on average, I would still rate the customer service of my ICICI credit card as “good” . Well, that’s my experience only and others can have a bad or worse experience with the credit card company. Before you apply for a credit card, you need to look at this very critical aspect of customer service and how transparent are they overall.

5. Convenience to pay the bills

Something which you will deal with each month is the payment of your credit card bill. Now almost all the credit card companies allow paying by net-banking, cheque, cash and other ways. But still, some banks can be really torturing and not that supportive. It can be cumbersome at times. There have been instances when people paid by cheque before time and it was not processed on time and the person had to suffer because of that and had to run around to get back those charges reversed.

Here is the example

I got the CIR and there is absolutely no big hiccups except one in ICICI bank credit card (I had lot of issues with this bank and some late payments od 1-7 days in some credit cards in very few months. Never listens customer and pathetic customer care executives) of which the DPD is consistently not (000) good for last 5 months. But hey it wasn’t my fault. I dropped the cheque of overall due (about 12000/-) and they never bothered to inform me that my payment was not credited (god knows what they did with cheque). After 5 months when they made a balloon of charges and the whole amount jumped to 19000/- they called me and threatened me of CIBIL. I was never in the mood to not pay the due hence paid the whole amount 19000/- notified by them. Could this lead to this much low score?? – Link

Not to mention the unfair update on CIBIL report which affects you for years. So it’s a critical factor to look at before you apply for a credit card in India.

6. How easy was it to apply for credit card

Have you gone through a frustrating time applying for credit card, really had to run around to get a credit card even when you were totally eligible to get one. While this criterion is not that big, as its a one-time event still you can consider it before you apply for one. I recently had a hard time opening a saving account for my brother with ICICI bank because they had no way to accommodate people living on rent with friends, however, Kotak bank did it for me, at that point of time, the “ease of opening the account” was really a big thing for me. In the same way ease of applying for a credit card can be one important factor at times.

Best & Worst Credit Card in India as per Survey

Below are the results of the survey which we conducted on credit cards. Have a look at it.

Best Credit card in India

If you look at the above chart you will see that the best credit card in India turns out to be Citibank Credit Card and the second best is the HDFC Bank Credit card overall. However, this does not mean that other credit cards are not good at all the parameters. ICICI Bank credit card is very close to all the other cards in several parameters.

While the SBI Bank credit card and HDFC Bank credit card top the list when it comes to interest rates charged (means they have lower interest rates compared to others), but HSBC Bank credit card comes last. HBSC bank credit card has not done well in any parameter as per the survey and has the lowest ranking in all of them.

Average Credit Card bill for the last 6 months

86% of people are paying less than Rs 20,000 per month as there credit card bills, that’s last 6 months average. Whereas only 2% of people had more than Rs 50,000 bills per month. I suspect that these people must be using their credit card for various mandatory expenses which are required anyways. Lots of reward points and benefits to them:).

Best Credit card in India

Credit Card Reviews from participants

Ramakrishna says on his Citi IOC Card – I am using credit cards from past 9yrs. If u use the credit card in the right manner, u get the most out of it. And make sure you pay your outstanding amount before the due date. Most of the times, by end of month I am barely left with the liquid and credit cards used to save during that bad times and used to pay the outstanding by the due date. I never ended up paying any interest until now. The best credit card to date to my knowledge is Citi IOC card. I had made use of the rewards and offers at the extreme.

Kriprabha on Axis Gold Card – Very, very bad – due to careless service. 1) Not pointing out auto-debit facility – I missed one annual fee, so from 300/- bill went up to 1000+. 2) Not applying their own rules about marking a lien on my FD Receipt — my card was blocked for weeks and no one seemed to know this requirement, and they kept assuring me the card would be activated soon. As of now, the card is inactive – reason unknown. I am snipping up a card today – want to avoid AMC which they will apply happily! These bankers live and work in air-conditioned comfort which is possible due to high ABQ. I will soon terminate my “relationship” with them. I am a senior, living on savings, so these visits to the bank cost a lot in auto fares.

Raghavendra on HDFC Credit Card – Experience with HDFC Cards has been good. I have never looked at the interest option since I’ve always paid the outstanding amount by the due date. Was charged a penalty a couple of times when I paid the outstanding a couple of days after the due date ( had not even paid the minimum amount by the due date, owing to travel), but the same was reversed after a detailed email to HDFC Cards requesting for the same, in light of good payment track record except for the 2 instances. On the rewards front, HDFC Bank does not have a very good rewards scheme as compared to others. But customer service is excellent. They also have two billing cycles, one of the 25th and the other on the 5th and allow customers to choose any one of them. This is useful for those who already have a card and choose a second to make optimum usage and take advantage of the alternate billing cycles

Atri on HSBC Credit Cards – I am using HSBC gold credit card for more than the last 7 years. I always submitted payments in time and even insured the card purchases. It was as good at their services and also at the part of mine but I do not know why in their review they decided to cancel my card and stop their services to me. I even asked HSBC CUSTOMER representative but they could nor reply satisfactorily. I now feel I should have to get a credit card from the Public Sector Bank only and wasted my time and money. My message to all public is to use Bank Account / Credit Card only of Public Sector Banks like SBI, Canara Bank, Central Bank of India, etc. for a good governance in the nation. Thanks and Regards.

Some more data out of credit card survey

  • Only 10% of people had 4 or more credit cards
  • Around 42% of people had exactly 1 credit card with them
  • The average number of credit cards held by one person was 2.03

Other Credit Cards

Note that this survey is focusing on top 6 credit cards and their comparison with each other only, which came out as the result of the survey, but there are several other banks credit cards in market which can be considered, but due to small amount of feedback in the survey, it was not sufficient to conclude anything about them nor do any kind of review about these credit cards. Here is the list of those other credit cards

  • Axis Bank Credit Card
  • Amex Credit Card
  • Kotak Credit Card
  • Bank of India Credit Card
  • Indian-Bank Credit Card
  • Bank of Baroda Credit Card
  • IndusInd Credit Card
  • RBS Credit Card
  • Syndicate Credit Card
  • Andhra Credit Card
  • Canara Credit Card
  • Corporation Credit Card
  • PNB Credit Card
  • ABN Credit Card

Did this article help you in choosing the best credit card in India? Is there any other parameter to look at before you will apply for a credit card? Do you think this survey helped you in choosing a good credit card in India?