JAGOINVESTOR

IMPS – Online Money transfer in 30 seconds from your Mobile Phone

Posted on October 1, 2012August 21, 2019 by Jagoinvestor

IMPS or Interbank Mobile Payment Service is a technology which offers an instant electronic fund transfer service through mobile phones between two banks in India. There are other two money transfer systems called NEFT and RTGS already in India, but they are not a mobile payment system like IMPS and they’ll take some time to get settled. IMPS is a real time system of money payment. The service has been developed by National Payments Corporation of India (NPCI), a section 25 company formed by Reserve Bank of India (RBI) and Indian Bankers Association (IBA). Here’s a testimonial from Harsh, who transferred money using IMPS…

Recently I issued a cheque from one of my account and did a NEFT transfer to build balance but NEFT failed to do the job in 48 hours, in the middle of night i started searching for how to do a instant transfer and then I got to know of IMPS. Registration happened instantly in matter of minutes and shockingly money transfer happened in micro seconds even faster than a google search – (via)

The transfer limit through IMPS is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer.

How to do Money Transfer using IMPS

All you need to make a transfer through IMPS system is your mobile number and MMID number . MMID number is a 7 digit random number which you get by registering for IMPS facility with your Bank. But make sure your mobile phone is activated before you register for MMID. Note that both sender and receiver should have their phone and MMID number from their respective banks. Once you have that you can transfer the money using sms or internet banking . A lot of banks also provide a mobile application which you can download from bank website and install on your phone. Note that before sending the money to the receiver, you should register them once as you do for any bank account. The image below gives you good idea on what needs to be done for carrying out an IMPS transfer.

Steps to transfer money through Mobile using IMPS

What happens with your do a IMPS Transfer through Mobile ?

When you make a IMPS transfer, your sender mobile first sends this information to the sender bank , which checks the data; whether your MMID is correct or not and if it matches with what it has in its system. If it’s all correct, it debits the money from your bank account and transfers this to the NCPI server, which then transfers it back to the receiver’s bank. The receiver bank goes about checking everything again and then sends the status of the whole transaction to NCPI, which passes it back to Sender’s bank. Both Receiver and Sender are then updated about the transaction through SMS. All this normally takes just about 15-30 seconds for everything to happen and the money gets transferred near instantaneously. How does IMPS work

5 Advantages of IMPS over NEFT and RTGS

Let me enumerate 5 major reasons why you want to register with your bank for IMPS and generate your MMID as soon as possible. IMPS offers some major advantages over NEFT or RTGS money transfer and here they are

1. Instant Transfer of Money

When you do an IMPS transfer, it happens instantly within few seconds, so it’s practically real time money transfer, unlike NEFT or RTGS which works in batches and takes time in money transfer. Which means in case of emergencies, you can use IMPS and it will act like a fast money transfer mechanism

2. Transfer without Internet Connection You dont need a internet connection or a computer for IMPS transfer, you can just do the transfer using your mobile phone through SMS or using the mobile application, hence you can do the money transfer even when you are travelling, all you need a mobile connection 3. Money transfer even on Holidays and outside working Hours

You can transfer the money anytime, 24X 7. With NEFT or RTGS , you can’t do money transfer on holidays or even Sundays. You can’t do it outside the working hours defined by the banks. But with IMPS you can literally make transfers in early morning, midnight or whatever time you want.

4. No Need to disclose Bank account number and other details

All you need for making the transfer is mobile number and MMID , so you don’t need to disclose your actual account number or even the bank name.

5. Easy, Simple and Secure

Making a IMPS money transfer is so easy. All you need is the MMID, Phone number and the amount. The money gets transferred easily so fast. It makes easy for those who fear technology and do not want to deal with it . You can teach this to your parents or some one who is not that technologically advanced.

IMPS Charges

The charges depends from banks to banks . While exact charges details you can find from your respective bank, it seems the charges are extremely low and are on per transaction basis, not on the limit of money. It seems to be Rs 5 per transaction (not confirmed) yet. Apart from the charges from banks for using the service, if you are doing the money transfer using SMS , you will have to pay standard sms charges . However if you use internet or the mobile application, there will be no charges apart from the service charges.

Money Transfer Limit under IMPS

The limit is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer. Transactions up to Rs. 1000/- can be facilitated by banks without end-to-end encryption.

Which Banks are part of IMPS Facility

As of now 52 banks are the members of IMPS facility. Some of them have started the IMPS service and some will start it very soon. Those are

ICICI Bank
Axis Bank
State Bank of India
Indian Bank
Kotak Mahindra Bank
Oriental Bank of Commerce
Union Bank of India
Andhra Bank
Canara Bank
HDFC Bank
Lakshmi Vilas Bank
Bank of Baroda
Indian Overseas Bank
Bank of India
Punjab National Bank
South Indian Bank
Vijaya Bank
IndusInd Bank
UCO Bank
Federal Bank
State Bank of Hyderabad
Citibank
State Bank of Bikaner and Jaipur
Punjab and Maharashtra Co-operative Bank
The Thane Janata Sahakari Bank
Development Credit Bank
Dombivli Nagari Sahakari Bank
State Bank of Travancore
Catholic Syrian Bank
Syndicate Bank
Yes Bank
State Bank of Patiala
Allahabad Bank
Karur Vysya Bank
The Greater Bombay Co-operative Bank LTD
Corporation Bank
IDBI Bank
Tamilnad Mercantile Bank
United Bank of India
Standard Chartered Bank
Bank of Maharashtra
Central Bank of India
Dena Bank
Dhanlaxmi Bank
ING Vysya Bank
Janata Sahakari Bank, Pune
Karnataka Bank
State Bank of Mysore
The A P Mahesh Urban Co-operative Urban Bank
HSBC Bank

you can look at the latest list of all the banks and their details here What do you think about this technology ? Will it help in your financial life ? Are you going to use IMPS facility to money transfer through your mobile ?

NEFT and RTGS – A detailed Guide

Posted on September 3, 2012August 21, 2019 by Jagoinvestor

Lets try to understand what is NEFT and RTGS and what is the difference between them. NEFT and RTGS are two main mechanisms to transfer money from one bank to another bank in India. Transferring money between two accounts in same bank is pretty straight forword and its a internal matter of the bank, it does not have to deal with other banks and their protocols, however when one bank wants to send the money to another bank in India, there is a defined mechanism it has to be done and hence NEFT and RTGS comes into picture. Both these systems are maintained by Reserve Bank of India. Lets understand both of these

NEFT – National Electronic Fund Transfer

NEFT full form is National Electronic Fund Transfer, and its a system of transfer between two banks on net settlement basis. Which means that each individual transfer from one account to another account is not settled or processed at that same moment, its done in batches . A lot of transactions are settled in one go in each batches. Presently, NEFT services are available from 8:00 am to 6:30 pm on weekdays (Mon – Fri) and from 8:00 am – 12:30 pm on Saturday.

Any NEFT Transfer done between 8 am – 5 pm generally gets settled on the same day, but if you deposit the money after 5 pm, then that will be settled the next working day. In case of Saturday, any money deposited between 8 am – 12 noon can be expected to reach the beneficiary account the same day.

NEFT Transfer Example

For example lets say Ajay has ICICI Bank account and Robert has a bank account in HDFC bank , Now Ajay deposits Rs 10,000 in Vijay account through NEFT transfer at 10:30 am . The money will be then taken out from Ajay’s ICICI Account and will be sent to Vijay’s HDFC bank the same day, then HDFC bank will credit Vijay’s bank account. In case money can not be transferred to the target account (beneficiary account) , the money will be credited back to the source branch within 2 hours of the batch in which it was processed.

RTGS – Real Time Gross Settlement

RTGS full form is Real Time Gross Settlement and its a system of money transfer between two banks in real time basis, which means the moment one bank account transfer the money to another bank account, its settled at that time itself on real time basis between the banks, but the beneficiary bank has to make the final settlement to the bank account within two hours of getting the money. RTGS is the fastest possible money transfer between two banks in India through a secure channel.

Let me give an example, lets say Ajay has a SBI Bank account and Vijay has an Axis Bank account, Ajay transfers Rs 5 lacs to Vijay’s account through RTGS transfer, SBI bank instantly transfers Rs 5 lac to Axis Bank, now Axis bank has 2 more hours to deposit it in Vijay’s account . Hence in worst case even with RTGS transfer there can be delay of 2 hours.

NEFT and RTGS Timings

NEFT and RTGS Charges

NEFT and RTGS transfer charges depends on the Bank. RBI has guidelines for the maximum fees which can be charged, but it finally depends on the bank in question. Note that NEFT and RTGS charges, varies depending on the amount transferred and the timings when its done. While NEFT charges depends purely on the amount transfered, RTGS charges depends on the amount transferred as well as the timings of the day when its done . A RTGS transfer early will cost a little less charges. Note that, Service tax is also applicable to the charges. Below are the charges shows for NEFT and RTGS for retail banking (not for institutional banking)
NEFT and RTGS Charges

Information required to make an RTGS & NEFT payment?

For making a payment through NEFT/RTGS, following information has to be furnished.

Amount to be remitted
Remitting customer’s account number which is to be debited.
Name of the beneficiary bank.
Name of the beneficiary.
Account number of the beneficiary.
IFSC code of the destination bank branch

Note : MICR code is generally not required for NEFT or RTGS transfer

Points to Note

Each Bank has their own NEFT and RTGS application form, which you can download from their website
RBI declared holidays each year when you cant do NEFT and RTGS fund transfer transactions, see 2012 list
To find out different bank branches which are enabled for NEFT and RTGS transactions, you can see this RBI list

Difference Between NEFT and RTGS

Finally let me list down all the differences between NEFT and RTGS in a table, so its easy for you to understand the conclude finally.

Criteria	NEFT	RTGS (Retail)
Settlement	Done in batches (Slower)	Real time (Faster)
Full Form	National Electronic Fund Transfer	Real Time Gross Settlement
Timings on Mon – Fri	8:00 am – 6:30 pm	9:00 am – 4:30 pm
Timings on Saturday	8:00 am – 12:30 pm	9:00 am – 1:30 pm
Minimum amount of money transfer limit	No Minimum	2 lacs
Maximum amount of money transfer limit	No Limit	No Limit
When does the Credit Happen in beneficiary account	Happens in the hourly batch Between Banks	Real time between Banks
Maximum Charges as per RBI	Upto 10,000 – Rs 2.5 from 10,001 – 1 lac – Rs 5 from 1 – 2 lacs – Rs 15 Above 2 lacs – Rs 25	Rs 25-30 (Upto 2 – 5 lacs) Rs 50-55 (Above 5 lacs) (Lower charges for first half of day)
Suitable for	Small Money Transfer	Large Money Transfer

Are you now clear about the difference between NEFT and RTGS and their transfer charges?

How to calculate monthly average balance ?

Posted on August 2, 2012November 27, 2019 by Jagoinvestor

Do you understand what is the meaning of Minimum Monthly Average Balance in your saving account? When you say “Monthly Average Balance of your saving bank account is Rs.10,000”, what does it mean exactly?

A lot of people feel that their balance in saving bank account should not go below Rs.10,000 on any given day, otherwise, there will be penalty charges and they make sure that they have a buffer of Rs.10,000 in their saving bank account all the time.

This means that their accounts should always have that much surplus. However, the way the monthly average balance is calculated is different and very simple.

Meaning of Monthly Average Balance?

It simply means the average of all the closing day balance in a given quarter. So given a quarter, add up all the closing day balance and then divide it by the number of days in the quarter. If you have to put it as formula it would be

MAB = (Total of all the EOD closing balance)/(number of days in the quarter)

Let me show you an example. Let us say the quarter we are talking about is Apr-June. Now your balance at the start of the quarter (Apr 1) is Rs.20,000. You withdraw Rs.15,000 on 15th Apr and then Deposit Rs.8,000 on 12th June. What will be the Monthly average balance for the Apr – June Quarter?

quarterly average balance

Can you take this 2 min survey and help us

Learnings & Tips

Keeping Rs.10,000 in a bank account for 15 days is same as keeping 5000 for full 1 month (10k * 15 days = 5k * 30 days)

PSU Banks vs Private Banks

A lot of PSU banks like SBI Bank, Bank of India, Allahabad bank generally have a lower Monthly Average Balance to be maintained in a savings bank account, its average limit is up to Rs.5000 in most of the banks and non-maintenance Charges are very low around Rs.40-50 only.

However Private banks like ICICI Banks, HDFC Bank, Axis Bank etc have Monthly balances as high as Rs.10,000 and high charges as a penalty for not maintaining it, It some times can be as high as Rs.750.

Did you knew how the minimum average balance is calculated ? Now will this information impact your banking in any way ? Will you keep less money in your bank account because you now understand that Monthly average balance is calculated in a different way than you thought?

Saving Account number Portability – Is it Needed ?

Posted on January 12, 2012August 21, 2019 by Jagoinvestor

Saving account numbers will soon be portable in India. Finance ministry is working on this from some time and soon you will be able to change your banks without changing your Bank account number. Saving account number portability will be almost similar to porting your mobile number to different network carrier.

Why people don’t change banks?

A lot of people do not change their banks because there is a lot of headache involved in the procedures. If you change your Bank from ICICI to HDFC, it means you have to change the account numbers at different places (for ex SIP ECS). Also you will have to close the ICICI account
and open a new account in HDFC which means repeating the procedure all over again. These tasks stop people from taking action of moving from one bank to another. However with saving account number portability, you will be able to change your Bank account from bank A to bank B with less paper-work. The procedure is expected to be small as the KYC norms will also be taken care and no there will be no change in the Account Number.

Recently, with the Savings bank rates deregulation and NRE/NRO deposits deregulation has resulted in many banks increasing their saving bank interest rate to 6-7% (example YES BANK and KOTAK bank) and a lot of banks increased their NRE/NRO deposits rates from 3-3.5% to 8-9%, however a lot of people have not considered to change their banks just because of the WORK involved in the opening of new bank account. If saving account number becomes portable then a lot of people might have considered doing this.

Implementation of Saving account portability is a big task!

However this idea looks great to a lot of people, the whole idea of portability is not that easy and there are several challenges in this process. Those are

Renumbering the 500 million bank accounts – There is approx 500 million saving bank accounts in India and these account numbers are 12, 13 or 14 digits account numbers in most of the cases where the first few numbers are for branch code . Now the first task before portability is achieved is that all these account numbers will have to be renumbered and there has to be same format for these. So that your account number after changing the bank is still same. Now how will this be achieved? How much realistic this is and how investors will be able to accommodate this part in their banking life.

Different banks having their own KYC rules – At the time of opening a saving bank account with a bank, it has its own procedure and documentation and they feel that they do the best job in that. When portability comes into picture, there has to be same kind of KYC norms with all the banks and they should feel confident about it, as they would not like to rely upon others KYC. This part would be rather challenging.

Do you feel you need this saving account number portability or is it a stupid idea ?

Which Banks have highest Fixed Deposits interest rates ?

Posted on June 23, 2011August 21, 2019 by Jagoinvestor

Do you know which bank in india has the highest fixed deposits interest rates ? But before that, let me ask you – Do you know what is the interest rate of your Fixed Deposit ? If it was opened a few years back, all you would have got is around 6-8% depending on the bank and tenure. But today its a different scene! . Fixed deposits interest rates are high these days and you can observe one of the other bank announcing fixed deposits interest rates revised each month and in range of 9-10% . I will show you a snapshot of various banks Fixed deposit interest rates with varying tenures.

For simplicity purpose, I have not included tenures of less than 6 months . See the graph below . Green color represents interest rates higher than or equal to 9.25% . Pink represents exact 9% . The banks mentioned in the table below are Tamilnad Mercantile Bank, State Bank of Bikaner and Jaipur, Yes Bank, Karur Vysya Bank, Kotak Mahindra Bank, Catholic Syrian Bank, IDBI Bank, United Bank of India, Lakshmi Vilas Bank, Karnataka Bank, State Bank of Travancore, Corporation Bank, Indian Overseas Bank, City Union Bank, ING Vysya Bank, Indian Bank, Central Bank of India, Federal Bank, State Bank of Mysore, Punjab National Bank, Punjab & Sind Bank, ICICI Bank, Dena Bank, Indusind Bank, Canara Bank, State Bank of Patiala, Syndicate Bank, Barclays, Axis Bank, J & K Bank, State Bank of India (SBI), Union Bank of India, Bank of Baroda, Vijaya Bank, Dhanalakshmi Bank, South Indian Bank, DBS Bank, HDFC Bank, Andhra Bank, UCO Bank, Allahabad Bank, Bank of Maharashtra, Development Credit Bank, Bank of India, HSBC, Citibank , tandard Chartered Bank , RBS Bank and Deutsche Bank . Look at the table below for the indicative interest rates for different tenures.

Fixed Deposit Interest rates in India

Note that a lot of banks offer high interest rates for special tenures like 500 days, or 555 days or 1000 days, but they have some restrictions which people dont know – some of them are

Some banks have provision, if rates increased in future, you can not apply for extention at higher rate of interest, instead you have to close that account and apply for new one.
Automatic renew not possible.
Upon maturity, you will not be able to get overdue interest.
Sometimes, you cannot premature close the deposit. however, these conditions vary from bank-to-bank.

Thanks to Lokesh for this information

High level Observations

There are some patterns we can see in area of fixed deposits . here they are

Fixed deposits with high interest rates for almost all the tenures are not the heavyweight banks, but the new generation banks, they are Tamil Nad Mercantile Bank, Karur Vyasa Bank, Kotak Mahindra Bank, Lakshmi Vilas Bank and others

Most of the banks provide 0.5% higher interest rates for senior citizens if the tenure is more than 1 yr . But if tenure if lower than 1 yr, the interest rates are same for senior citizens also . This is widely true , but some banks like Axis bank , SBI bank , ICICI Bank and HDFC Banks gives 1% higher interest to senior citizens.

Most of the foreign banks like Citibank, RBS , Standard Chartered has low-interest rates in range 6-7.5% . This is unattractive during these times when other banks are giving higher rates .

Low and Medium risk appetite investors can cheer

For investors how find themselves not too comfortable with equity and for those who want to park their money for few years without taking any risk and earning some good return in range of 9-10% , Fixed deposits are very good options.

The only point is if you are in high tax bracket, most of the returns will go in tax, but for investors who are in lower tax bracket of 10% or below the permissible limits , they can look for these options without much thought . These fixed deposits were for the year 2011 , but for most part of 2012 also these bank fixed deposits interest rates will be applicable .

How RBI rate hike impacts your financial life ?

Posted on May 5, 2011August 22, 2019 by Jagoinvestor

Few days back, there were some changes announced in repo rate and saving bank account interest rates by RBI. Do you want to know how you as an investor would get impacted with the recent changes done in interest rates by RBI? I have seen that a common man always ignores this kind of news because it looks too complicated to him or he can’t understand how his life will be affected by such fluctuations. In this article, I will touch two most important changes that were recently disclosed by RBI and show you in simple manner how it’s directly related to a common man. Note that this article is limited in its scope by looking at the two changes from the point of view of its direct impact on a common man.

Interest rate hike by RBI

Let me quickly go through two main changes which RBI recently changed and explain to you how it impacts common man. Note that this article is limited in its scope of looking at these two changes only from a viewpoint of how a common man is affected directly.

1. Increase in Repo Rate by 0.5% (6.75% to 7.25%)

Repo rate is a rate at which Bank borrows money from RBI, which was increased by 0.5% by RBI and is at 7.25% right now. So now what are the effects of it on a common man? Let’s understand this concept. Banks offer loans like Home loans and Auto loans to someone at an interest rate which is directly proportional to Repo rate (interest rate for common man = repo rate + X %). Now change in repo rate has a direct impact in the interest rates offered to customers for loans by the same or by more magnitude.

Now with the increase of 0.5% in repo rate, this increase will directly be passed to a common man (in case of floating interest rates). In fact some banks like IDBI bank and Yes Bank have already increased their interest rate for loan takers. In fact, Chanda Kochar (Managing Director of ICICI Bank) has already said that this repo rate increase can increase the interest rates for end consumers in the range of 0.5% – 1.0%. So if your interest rate for home loan or Auto loan was 10% p.a, it will now increase to 10.50% at least. This has direct impact on the EMI which you pay for your house.

Let’s see the calculations. If you had bought a house worth 30 lacs @10% interest, 15 yrs tenure, then the EMI would be Rs 32,238. With an increase of 0.5% in interest (10.5%), your EMI will rise to Rs 33,162. That’s an increase of Rs 924 on every EMI. However if the interest rates rise by 1%, in that case your EMI will increase by Rs. 1,860 (calculate yourself). Now imagine if you took the loan at the time of low-interest rates and over the years the interest rates keep rising every quarter, your EMI can shoot up so much that it would make your cash flow very uncomfortable. For example, just last year in Mar 2010, the repo rate was 5%, and then RBI increased it up to 7.25% today. This means there was a 2.25% increase in the last 14 months. You can understand the impact of this on EMI rise over the last 1 yr!

Hence, now you understood how change in repo rate directly impacts a common man, because that change in repo rate is passed on to common man and his EMI’s are affected in the case, the person has opted for floating interest rate option while taking the loan.

Interest rate hike by RBI

2. Increase of saving bank interest from 3.5% to 4% .

The second change which RBI has done is to increase the saving bank interest rate. Till now it was 3.50% which was set long back, many years ago and was never revised. But finally with this year’s credit policy, RBI increases it to 4%. Now you must be thinking how does this impact common man? It’s a good thing for account holders.

Well, in a way it’s a good thing that a person will get higher interest rate on his cash lying in the saving bank account, but let’s see how it impacts a bank. A bank that was paying 3.50% interest on the money will now have to pay 4% interest. That means now, it would directly impact Bank’s profitability. Suddenly a bank which was able to add up that 0.5% interest in its profits has to pay it to customers and that would hit their margins. Bank’s profits will come down by that much amount. This is not a good thing for the bank. That’s a simple reason why you should have expected a big fall in banking stocks and that’s exactly what has happened on the day when this news came in that saving account interest has been raised.

Banking and automobile stocks anchored the broad-based selling. While the hike in saving rates is expected to hit the net income margins of the banks; muted sales numbers in April, high fuel prices, and likely rise in auto loan, diminishing outlook for automobile space.

Among banking stocks, Bank of India, PNB, SBI and Yes Bank tumbled 6.47 per cent, 5.07 per cent, 4.03 per cent and 4.03 per cent, respectively. ICICI Bank and HDFC Bank dropped 2.76 per cent and 2.40 per cent.

Note that around 22% of the money in banking system lies in normal savings bank account and that’s approximately 10 lakhs crore in all the banks. Taking a hit of 0.5% on that kind of money is Rs 5,000 crore. That’s a direct impact of the bank margin of profits. The worst affected will be those banks where saving account ratio (the amount of money lying in bank accounts vs. total money with bank in all forms) is very high. Clearly banks like ICICI bank, SBI bank, Punjab National and HDFC banks are the names I can think because their saving bank deposits stand in range of 30-35%, much higher than the average of 20% across all other banks.

Now how does this impact the common man? Again this move of increasing the interest rates for saving bank is going to affect banks profitability and banks are going to pass this burden to those people who take loans from them, which means those who only put money in bank will stand to gain and the people who took loan will be losing out.

S Raman, chairman and managing director of Canara Bank, said, “There was a need to increase savings bank rate. It will lead of cost of funds going up but how much will it affect the margins of banks will depend on the extent of pass through of these rate hikes to consumers in terms of lending rates. Lending rates can go up by 50-75 basis points.”

Conclusion

Repo rate fluctuations which come from Banks in the form of increased interest rate for loans will directly impact common man. Knowing this can help an investor in many ways. The biggest benefit a person can from such fluctuations is if he time’s his decisions based on where the interest rates are inclined towards.

Let me know what do you think about this rate hike in repo rate and how is it going to impact your life?

What is Banking Ombudsman ?

Posted on April 5, 2011August 21, 2019 by Jagoinvestor

Do you know you can complain to Banking Ombudsman incase you have any complaints against your bank in India ? Banking Ombudsman is a body created by RBI to look after banking related complaints. Imagine the scenario’s – You insert your card in ATM to withdraw Rs 500. The transaction fails, but your account is debited by Rs 500. You’re frustrated, you’re irritated, you complain to your bank about the money being debited after the failed transaction. The bank tells you that your money will soon be credited to your account, but nothing happens for weeks… Six months pass by, with all of this up-down in-out stuff, You’ve done all you can, but no body is listening! . Can you imagine getting a compensation of Rs 16,200 because of your bank’s inability to honour the rules set by RBI? Can you imagine, that for not getting Rs 500 within a few days, you can get Rs a 100 penalty for each 162 days you have waited? Yes it can happen! And it has happened! . In this article, I’ll show you the power of the Banking Ombudsman and some case studies which show you that getting your complaints addressed is more easy that you think!

Banking Ombudsman RBI

What is Banking Ombudsman ?

The Banking Ombudsman is a senior official, appointed by the Reserve Bank of India to address grievances and complaints from customers, regarding deficiencies in banking services. It covers all kinds of banks – PSU Banks, Private banks, Rural banks and co-operative banks. Even though, it was originally setup in 1995, there were major revisions in 2006 covering transactions related to complaints of ATM cards, debit cards and credit cards, deduction of service charges by banks without prior intimation, unfair practices of banks and non-compliance by direct sales agents (DSA) of banks for services promised while opening an account etc. It was last amended in Feb, 2009 to cover deficiencies arising out of internet banking too.

Today, the Banking Ombudsman covers almost all kind of complaints for banking services. To give you a brief idea about their effectiveness, Banking Ombudsmen received 79,266 complaints in the year 2009-2010 out of which around 94% were handled and just 5-6% of the complaints remained pending for more than three months as on June 30, 2010. There are a total of 15 Banking Ombudsman in our country. You complain to the one which comes under the jurisdiction of the Bank location, i.e., if your bank is in Bangalore, you can complain to the BO from Bangalore region. Incase you or the bank is not satisfied by the decision given by the Banking ombudsman, in that case within 30 days of BO decision, the complaint can be taken forward to Appellate Authority, which is a Deputy Governor of the RBI . Its just like going to supreme court if you are not satisfied by High court decision 🙂 .

What kind of complaints are taken care by banking ombudsman ?

So, the first question that comes to mind naturally is – “Will it be helpful for me?” You wont believe it, but the most basic problems, a common man faces (See an example of what I faced) , like rude behaviour of bank officials, delays in disbursing loans, forcing customers to buy insurance policies for processing loans etc., are all addressed by Banking Ombudsman (BO), and the process of complaining is as simple as filling up a form online or sending in a filled form to a postal address.

The best part is that if you are harassed because of any issue or have undergone through mental agony, you can ask for a compensation upto Rs 1 lac. Also some readers of the blog has acknowledged that banking ombudsman were useful for them (see this , this and this comment) . So let me list down some of the possible scenarios where you can file a complaint with Banking ombudsman.

Levying of charges without any notice or Information.
Charging higher rate of interest linked to BPLR on Housing Loan
Any Loss suffered because of lack of co-ordination from Bank side
Unreasonable credit card charges
Fraudulent transfer of funds by using net banking
Fraudulent transactions against lost credit card
Cheque lost in transit by the bank
Non-updation of CIBIL records
Loss of cheque from Cheque drop box
Closure of any account with providing any information or reason
When bank demands unreasonable proofs for openening of account
Change in terms and conditions without notice or valid reason
Delay in providing any service
Mis-selling of Insurance products
Forcing customers to take insurnace policies for processing Loans
Rejection of Loans
Harrasment to customer or misbehaviour for any reason
Casual approch from Bank on perfoming its duties

I ran a poll with title “Have you even been frustrated with your Bank and wanted to complain? ” on this blog, on which 100 people participated. Surprisingly , around 65% people said that they were frustrated on some issue with their bank and wanted to complain. Only 35% said that they never had any issue with their bank which went to a level that they have to complain about it .

Banking Ombudsman survey

Real Life Cases Solved by Banking Ombudsman

As per the Banking Ombudsman Annual Report 2009-2010 , ombudsmen have resolved thousands of cases and helped common man get justice. I would say, this is a great way to raise your voice and show banks that they can’t take you for granted, just because they are bigger than you in size. A customer has to be treated as per the guidelines, and customer service is the critical part of any service provider. Just to give you some idea, the Banking Ombudsman annual report showcases around 57 different real life cases of how it has helped customers get justice (Page 57-73) . I am highlighting four of those live cases below

1. How a person got compensation of Rs 16,200 because he got less money from ATM

The complainant maintained an account with AB Bank. He withdrew an amount of Rs 500 from the ATM of DH bank on July 28, 2009. The cash dispensed by the machine was only Rs 400. However, his account was debited by Rs 500. The amount of Rs 100 was credited back to his account only on January 27, 2010 (Around 162 days late) & despite lodging the complaint immediately, no penalty was paid to him as per the instructions issued by DPSS, vide its circular dated July 17, 2009. Since the bank had delayed in affording the credit to the complainant’s account by more than five months, the BO directed the bank to pay the penalty amount of Rs 16,200 for the delayed period (Rs 100 for each 162 days) .

2. How a credit card holder got Rs 10,000 in compensation for non-updation of CIBIL records

One credit card holder complained about the bank’s claim against his settled credit card account dues, and non-updation of his status with CIBIL. The bank accepted that although the credit card account was settled three years ago, the status of the account could not be updated in the records of the bank with CIBIL (See a related example) , which was rectified subsequently. Clear negligence was observed on the part of the bank for not updating their records for more than three years, resulting in undue harassment to the complainant. The bank was directed to pay an amount of Rs 10,000 to the complainant as a token compensation for the violation of BCSBI Codes.

The Branch Manager assured him to provide the loan without delay. However after three months the branch returned all the papers stating that the Loan Disbursement Officer was ill because of which they were unable to provide the loan. With the intervention of BO, it was agreed by both the parties, that the complainant would resubmit the loan application and the bank would consider the same again. Moreover, since the complainant had lost Rs 5000 which had been paid as registration fee to the Institute, the bank agreed to pay Rs 5000 as a token compensation and another Rs 5000 as a service gesture. The education loan was sanctioned subsequently by the bank and the student got admitted to the MBA course in the same business school.

3. How a senior citizen claimed Rs 1 lakh in compensation for Harassment regarding the loan he never took

Even though the complainant had no business relationship with ABC bank, he was getting calls/SMS from the recovery agents using abusive language & demanding repayment of some loans which he had never taken. Several complaints to the bank against this harassment calls fetched no effect. The bank pleaded to the BO that the telephone numbers from which he was getting the abusive calls did not belong to any of their recovery agents. Based on this, the BO closed the case under clause 13(d) of BO Scheme (i.e. complaint without any sufficient cause).

As the complainant continued to get the harassment calls, he went in appeal. During the appeal, the bank admitted that the phone numbers from which he was getting abusive harassment calls belonged to their recovery agents and that they had since taken necessary corrective action to discontinue such calls. The AA observed that the bank had not conducted proper due diligence while sanctioning the loan to some third person indicating a major KYC lapse. To cap it all, the bank had misguided the BO resulting in the BO pronouncing a wrong order, damaging the credibility of the BOS. The AA set aside the decision of the BO and directed the bank to pay the appellant Rs 1 lakh towards compensation.

4. How A person got Rs 6,500 as interest for Failed ATM transaction

In a case of failed ATM transaction where the account was debited though no cash was dispensed it was observed that as per BO’s orders the amount was credited to complainant’s account, but the bank did not pay the penal interest in terms of extant RBI instructions for the delayed period credit of approximately 2 months. The bank was directed to pay penalty at Rs 100 per day amounting to Rs 6500 .

Proof that it works !

How Trivikram got his wrongly wrongly credited money to different amount .

I got my money back after complaining the issue in Banking ombudsman.

Last year May I transferred money through internet banking to wrong account. After realizing I called my bank officials and requested not to transfer. But it’s already transferred they need to contact with payee bank. The other bank people not given any information as I am not a account holder. I tried through my friend they told that it’s transferred back to my account. Almost three months I tried hard back and forth in both the banks but no use.
This month (5/04/2011) I got to know about Banking ombudsman through one of my colleague and I raised the issue with all my details. Today I got my money back:-).

Ankur on comments section mentions how he got his interest back by

Hey Manish,
some good news… i finally got my intrest back for arnd 20 days. though the amount was meagre but yet it was fruitful. i had known 3 persons who applied for this scheme and we 4 guys got 6000/- back in total.
now i believe that BO(directly got a call from the branch manager to come and collect the cheque 🙂 ) do works and finally thx to you guys for guidance.

cheers

How Atul got his IT refund with help of Banking Ombudsman

Hi Manish,

I had approached IT ombudsman for IT refund. After chasing IT officials for 2.5 years the experience with Ombudsman was inspiring. Not only I got the money back but with interest.

The only catch is that one needs to be patience and keep all proofs ready. Best way is to keep copy of letters send by post, copy of emails etc.

Regards

Atul

Procedure of Complain ?

There are two ways of filing your complain .

Online Complaint : You can complain to Banking ombudsman online by filling up the form here . Once you fill up the form , you can also upload your proofs like bank rejection letter, banks reply or anything else (it has to be PDF or TXT format only)

Offline Complaint : You can also complain in offline mode to Banking Ombudsman. Just download this form and fill up the complaint. You should provide your contact information, name and address of the bank against which you are lodging the complaint, documentary evidence and the compensation you need. Once you have filled up the form, you can send it to the Banking Ombudsman address which comes under your jurisdiction (Download the list of all 15 BO)

Should you complain ?

I dont see any reason why you should not ! . If you are frustrated anyways and the service is free and also does not take much time and effort to complain, then you should definately go ahead and complain to Banking Ombudsman for something which you feel you should get justice for. Forget about who will win and who will loose for a moment, but I would encourage you to atleast take the first step and be the part of this initiative atleast. If you case is genuine, I beleive banking ombudsman will help you for sure, It can take time, but dont let this get you get stopped . Go ahead .

Share your experience! . A lot of readers have never had a bad experienced with their banks (like me) , so its your responsibility to share your bad experience in comment section and make them aware about what had happened in your case and how bad it was. Also share what are you doing now ? Will you file a complaint with Banking Ombudsman ?

Auto Sweep Account – Enable it in your Saving Bank Account

Posted on March 31, 2011August 21, 2019 by Jagoinvestor

Do you have a Bank Account? Off-course you do! How much money do you have in your account? 5,000? 20,000? or a few lacs? If you have a lot of cash, lying idle in your Bank Account, and at the same time you don’t want to commit to long-term investment, you need to enable the Auto-Sweep facility in your Savings Bank account. This will make sure you earn good interest on a major part on the cash lying in your Savings account.

Auto Sweep Bank account

What is Auto-Sweep Account ?

“Auto Sweep” is a facility which provides, the combined benefits of a Savings Bank account and Fixed Deposits. Auto-Sweep facility interlinks your saving bank account with a Deposit account and makes sure any extra amount lying in your bank account above a threshold limit is automatically transferred to Fixed deposits and you earn better interest on your money.

How ‘Auto Sweep’ works?

This is how Auto-Sweep works. You define a “threshold limit”, and money up to that limit will be in the form of cash in your savings account and any amount above this, “limit” will automatically be converted into a Fixed Deposit and you will start earning normal FD returns on that part of the money. At any point in time, if you need money more than is lying in your bank account, the money lying in the Fixed Deposits is Reversed-sweeped into your savings account and you can withdraw the amount you wish.

Example

Ajay opens a new Savings Bank account with SBI. He enables Auto-Sweep facility on his savings bank account and defines the threshold limit of Rs 30,000 . Now suppose he has Rs 10,000 lying in the bank, He will be earning normal 3-3.5% interest on this money. After that if he deposits Rs 60,000 in his account, his total balance would be 70,000. But as this is above his “threshold limit”, the extra amount of 40,000 will be converted into a fixed deposit automatically and start earning returns equal to normal Fixed deposits with SBI (for example 8%). This way he always has 30,000 in his account for his daily requirements, and he has 40,000 converted into Fixed deposits which again is available to him incase he requires it.

Now suppose he has to withdraw 10,000 from his account, he will actually withdraw it from the cash lying in saving bank , and his balance will reduce to 20,000. However on the other hand if he wants to withdraw Rs 50,000 . then in that case, as his account balance will be just 30,000, an additional Rs 20,000 will be auto-reversed from his Fixed Deposit and he can withdraw total 50,000 .

Opportunity cost

A lot of us don’t bother about how much idle money is lying in our account and for how long. This happens because we think “I might need it soon, so lets not commit to any investment.” But then, the money keeps lying in the bank for months and months and sometimes even years.

Suppose your account has Rs 1 lac for 1 year, it will earn 3.5% interest on it, which is Rs 3,500 for a year. However if you have auto-sweep enabled in your savings account with threshold limit of Rs 20,000, the additional 80,000 will actually be in form of a fixed deposit and it will earn an interest of 8% (assumption). In this, you will earn 3.5% of 20,000 which turns out to be Rs 700 and 8% of 80,000 which is Rs 6,400 , a total of 7,100 , which is almost 100% more than the first case .

A lot of people have much more than 1 lac in their accounts, not just 1 lac. You can earn some extra returns if you just enable auto-sweep on your saving account . So find out if your bank provides the facility, just do it, and get it right away!

Also note that different banks have different names for this facility. For eg., ICICI Bank calls it ”Auto Sweep” , HDFC Bank calls it “Sweep-In” account , and SBI calls it “Saving Plus.” . Here is a list of other banks and the name by which they call this Auto-Sweep facility (thanks for Gopal Gidwani for the info)

IDBI Bank – Sweep-in Savings Account
Axis Bank – Encash 24
Union Bank – Union Flexi Deposit
HDFC Bank – Super Saver Facility
Bank of India – BOI Savings Plus Scheme
Oriental Bank of Commerce – Flexi Fixed Deposit Scheme
State Bank of India – Multi Option Deposit Scheme
Allahabad Bank – Flexi-fix Deposit
Bank of Maharashtra – Mixie Deposit Scheme
Corporation Bank – Money Flex
United Bank of India – United Bonanza Savings Scheme

Disadvantages of Auto-Sweep Account

Auto-Sweep has some disadvantages too. In general the interest rates of normal fixed deposit and FDs under Auto-Sweep are same, but some banks charge a penalty if the FD under auto-sweep accounts are broken before some duration like 1 yr and 1 day . But I think that’s fine. If not 8% , you will at least get 7%, still better than 3.5% .

Some banks are also known to give simple interest on the Auto-sweep Fixed Deposits and not compound interest as in case of normal fixed deposits .

Don’t over do it

While Auto-sweep is a wonderful thing for salaried class people who want to maintain liquidity, as well as want to earn more interest on their unused money, one should not over do it. If you are very sure that the money lying in your account will really not be used for long, better to use the normal Fixed deposit or Debt funds. Only if you are unsure of your money lying in bank and when you might need it, you should be using Auto-Sweep facility.

The way auto-sweep works, it makes it an ideal place to park emergency funds . So if you have kept 6 months of expenses as your emergency fund in Saving Bank, then you can enable auto-sweep facility and set threshold limit as 2-3 months of expenses, so that rest of the money can earn a better interest.

Comments: Did you know about Auto sweep account earlier? Do you think it will be helpful for you and do you plan to enable it?

How to insure your Credit and Debit Cards ?

Posted on May 30, 2010August 21, 2019 by Jagoinvestor

Last night I was having dinner with my friends and suddenly on of the friend realized that he has lost his wallet. The problem was not the cash in the wallet, or the cards. It was the misuse of the card and contacting card issuers to block the cards as soon as possible .

Have you found yourself in similar situation ever or have you lost your wallet which had many debit and credit card along with other important documents. Do you want solution for this problem ?

Here is the solution.

There is nothing like the shock of losing your wallet or purse with all the money and your Credit or Debit cards in it as these cards plays a significant role in our lives.

In India there are two service providers who provide this service of protecting your cards – Credit Protection Plan (CPP) and OneAssist.

If someone steals it by purpose or if you lost it and it goes in a wrong hand then there is a risk that the person may misuse your cards. To avoid this CPP is one of the good options.

What is CPP Card Protection ?

CPP Card Protection is India’s first comprehensive Card Protection service for use in the event of card loss, theft and related fraud.

If you lose your wallet or your handbag, simply make one free call to CPP. They will quickly notify the issuers of your cards to cancel your cards immediately, also they will provide emergency travel and hotel assistance to take care of you and help you get back home.

CPP Assistance Services is the part of CPP group which has already started services in other asian countries like Hong Kong, Singapore and Malaysia.

As per a report by Medianama, in January 2017 there are 28.8 Million credit cards and 818 Million debit cards in India

Every wallet on an average now a days contain one debit and credit card in cities . CPP has tied up with leading banks including Citibank, Standard Chartered, HSBC and Kotak Mahindra , Axis Bank , LIC and ICICI Bank to sell the CPP services. Read 5 tips for effectively using your Credit Card .

Features/Benefits of CPP:

Loss Reporting : Incase your cards are lost or whole wallet is lost you can call CPP on their helpline number and they will cancel all your cards immediately and will help you in replacing them after that
Fraud Protection : If your card has been misused then your get protection for it before or after the notification from your side . You are covered from 7 days prior to your loss report to CPP until your membership is valid.
Emergency Travel & Hotel Assistance : Incase you can’t pay your hotel bill or have lost the travel tickets or have money to buy travel ticket, CPP will arrange for your travel tickets for your return and will also help you pay your bills to the hotel . This applies to travel abroad as well. For Indian premium users they will also help you with Cash if you have lost cash in the wallet .
Document Registration : You can register important documents like passport, driving license, insurance policies with CPP which will ensure easy access if you should lose the originals.
Cash: For Indian premium users they will also help you with Cash of upto 20,000 if you have lost cash in the wallet.
PAN card & Driving License lost: In case you lost your PAN card with your wallet, CPP will also help you to get new PAN. There is no need to apply for that separately.

You can watch this video to know how CPP helps you..

Membership and Plans

They have three main plans and each plan have difference in the benefits they are providing. The plans are as follows:

Classic: single person membership
Premium: Additional membership to spouse only
Platinum: Additional membership to spouse and parents.

Besides membership they have differences in other benefits which they are providing and also their premium charges.

The membership plan is different as per the insurance companies or the banks from whom you are getting the CPP. The facilities provided by insurance companies are almost same.

You can pay the premium by master or visa card and the amount will be deducted from your account at the beginning of every year until you close for the plan.

There is a limit for ever benefit like Rs 1.5 Lac for Hotel Assistance and traveling and Rs.20,000 Cash in India only.

Procedure to apply for CPP services

Applying for the CPP service is a very simple procedure. Just follow the steps:

Fill the application form for the CPP service. These forms are available online on the website of the service providers or on the websites of the related banks.
Pay the premium fees as mentioned in the plan you have selected. Generally you need to pay full premium at the beginning.
Once you pay the premium fees the service providers will send you the welcome pack comprising the registration form, confirmation letter and a form of terms and conditions of your plan.
You need to fill the details of each card which you want to protect and come under the plan you have selected.
After filling the form completely, check it for the correction and send it back to CPP service providers.

Why Should you pay for CPP services ?

Incase you are using debit and credit cards heavily and carry bigger account balance than few thousands , It might make sense for you to protect your cards using their services .

It’s all about if you want to take risk or loss and fraud or not . The cost associated is not huge and can be considered, however I feel that card companies should have CPP built in with the card itself .

Things to remember before applying for CPP services

If you are paying for something then it’s your responsibility to check for every detail about that particular plan. Here are some important points you should check related to CPP:

Check for the benefits of each plan included in CPP before selecting any one of it.
Decide which plan you want to buy according to your needs.
Check for the premiums of the same plans at different service providers or banks.
Keep every detail of the payment of the premium.
Once you take the plan make sure you added each and every detail needed accurately.

Comments , Put your views on CPP and does it appeal you ? Do you think it will work with Indian Mindset ?

5 Logical Tips about Credit Cards

Posted on March 11, 2010August 21, 2019 by Jagoinvestor

Credit cards are becoming increasingly common in India, and while they come with a lot of convenience, the high interest rates and other charges mean that you have to be careful about how you use them.

In this post, we look at 5 tips on wise credit card usage, and how following them, can save you a whole lot of financial heartache. These 5 tips are pretty logical & self-evident; we have to understand that the free credit we get from a credit card is not really free. It’s actually a business for Credit card companies and hence somewhere in the whole process, they have to have a way to make money .

1. Pay your balance in full: This one is so basic, I was not going to point it out at all, but on second thought – I realized that this should really be the first point. Of all the loans you take, credit cards come with the highest interest rates. If you run a credit card balance every month, then the interest charges add up really quickly. If you have a balance on your credit card, pay it off in full before the next due date. This ensures that you don’t pay interest on your balance, which really is extra money you can keep to invest and build savings for yourself.

Curiously enough, I know of people who don’t pay off their credit card balance in full, but at the same time, put their money in low yield investments. This is really bad math. If you have a credit card balance that is charged at about 30% per annum and an investment that gives you just an 8% return – you are much better off paying the entire credit card balance before you even think of investing your money. The extra interest you pay on your outstanding balance offsets any interest income you receive from your investment. If you run a balance, realize, it normally is a strong indication that you are spending beyond your means. This is a bad financial habit that you should get rid of as soon as possible.

2. Avoid credit cards with annual fee: Unless you have a specific benefit in mind, from the credit card, don’t get a card that has an annual fee. It is always good, to get a credit card with no annual fee, because then the only expense you have on it, is the interest payment; and if you pay off your balance in full every month – you don’t pay any interest and your credit card will, in effect, be free! Add to that, the fact, that even most free credit cards have some sort of a reward program, you can benefit from. Why pay for something when you can get it free?

The other thing to keep in mind, while evaluating the fee, is how likely you are to benefit on it, based on your usage. I reviewed the HDFC Value Plus Cash Back credit card a few months ago, which had an annual fee of Rs. 700 and up to 5% cash back. At a cursory glance, it seemed to me that Rs.700 may not be very high due to the cash back, but a deeper look at the terms and conditions told me, that the cash back will only be credited to your account if the monthly balance is over Rs.10,000. I realized the card was not meant for people like me, who aren’t likely to run up such a balance on their credit card every month.

Bottom-line: If you are going for a credit card that has an annual fee – make sure you go through the fine print and are certain it will be worth the cost to you.

Credit

3. Get a credit card that is easy to pay off: I used to have an ICICI credit card and a SBI credit card. Both of them had similar features, but the ICICI card was really easy for me to pay off, as I had an existing ICICI Bank account, and the credit card was linked to it online. All I had to do, was go online, and pay off the credit card balance, through my ICICI login. As a result, I ended up using the ICICI credit card a lot more than the SBI one. Ease of payment, means that I can pay off the balance very often, very easily, and rarely run the risk of late fees or interest charges. While thinking of which credit card to apply for – consider just how easy it is, to make a payment on it.

This might sound like a trivial thing now, but you’d kick yourself later, if you had to pay late fees just because you lost your cheque book, or were too busy with your work to go to the bank and deposit the cheque. In fact, I’d go on to suggest that you add payment reminders on your email, phone or even a little post it on your refrigerator. Life gets busy sometimes, and a little help can go a long way in saving you late fee and interest payments.

4. Keep a track of your statement: A few years ago I went through my credit card statement online and saw that there were some charges from an unknown merchant. I was pretty sure, I had not bought anything from them, and I called up customer care to know what the charges were all about. I was put on hold for a long time, and couldn’t get through. However, the next day, I noticed that the merchant had reversed the transaction, and I even had a small credit from them.

While I was lucky in this case, there is no guarantee that credit cards won’t get abused. Always keep track of your monthly statement. If you can go online and check your transactions – that is even better, because you don’t have to wait until the end of the billing period. I go online every week or so and check up on my credit card statement to make sure no unauthorized use is happening.

5. Don’t use your credit card as an ATM: By this, I don’t mean that you shouldn’t use your credit card at the ATM, (although you should really, really avoid it as far as possible). What I mean is, there’s a tendency to withdraw cash from your credit card (since it’s so convenient) and that’s pretty addictive. Treating your credit card as an easy, reliable, access to cash will not help you in the long run. For one, the interest rates on cash withdrawals are generally much higher, and if you get into this habit, – you will run up high outstanding balances pretty quickly.

The cash advance limit, is also generally, a lot less, than the overall credit limit, so it won’t get you very far, anyway. The interest will keep adding up and grow very quickly. Withdrawing cash from your credit card should really be the last option. Usually, cash withdrawals come with some sort of cash advance charges, and more than that if you regularly withdraw cash from your credit card – again, it indicates a tendency to overspend and go beyond your means. This really means, that your personal finances are going down-hill.

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Read a Customer review on Mouthshut

I have saved all my friends by sharing my horrible experiences with ICICI Credit Cards.The customer care people are polite only till the greetings other wise they behave and speak like a criminal and very sarcastically. I have been using it for 2 years. But the customer care behavior problem is consistent. Normally I have been paying them always on time and the bill is normally above RS 5000. But once (3 months back) I had to go outstation suddenly and missed the pay date for first time for a day or two. The amount this time was also very low (maybe 1500 or 1800) as compared to other months bills. I suddenly started getting calls from a HORRIBLY SPEAKING customer care lady. When I mentioned I am travelling and will not be able to pay for another 2 days as my journey is a 3 day journey she started abusing and threatening me. She even mentioned that by tomorrow morning if I will not arrange for the payment she will send some one to my home for payment, when I said this is rubbish and she should not speak like this she started shouting and said “I will send someone and can do anything if not payed by tomorrow and reminded me that if I will not pick this call after seeing her number further she will be worse”. Is this is the way a bank should treat a long time and good customer? I have stopped using the card from that day. [LINK]

Credit Card Mistakes [Video]

Conclusion

The overarching theme of these tips is, “Get the convenience of credit cards for free.” That’s what it really boils down to.

To me, credit cards make shopping convenient and that is a big benefit, but at the same time, they also tempt me to go beyond my means, and then pay extra by way of interest. The key is to get the benefit of convenience but not have to pay anything for it. The above tips will help you do both, or at the very least – strike a balance between the two. What do you think? Have I missed out any obvious tips or is there something you’d like to add, based on your experiences?

POLL

Comments please ? Leave your comment to provide another tip 🙂 and let us know what you think about Credit cards .

This is a guest post written by Manshu from OneMint. If you liked this post, please consider subscribing to his site.