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Shanthi Venkataraman

ARE you one of those people who does not have a credit card for the fear of running up enormous bills? Maybe you should look at ABN AMRO's Freedom Credit Card.

No, it's not what you think. "Freedom" does not mean no credit limit. The card merely gives you the flexibility to alter your credit limit to control your spending. That way, you do not become a slave to your credit card.

How it works

Once you get a credit card, it is obviously tempting to swipe it at every opportunity. Few months down the road, you would have plenty of reward points.

But if you have not been disciplined in settling up on time, you would also have run up a mountain of debt.

If you are so caught maybe it is time to get serious about controlling your spending.

With a Freedom Credit Card you can decide to lower your credit limit and thereby control your spending.

You can do this over the phone. You can also assign a specific percentage of your credit limit for use by your add-on card members, as another step towards protecting your finances. You can raise your credit limit back to what was originally assigned to you.

The card is being offered for an annual fee of Rs 595. You get an interest-free credit period of about 50 days.

If you choose to roll over your payments every month, however, you will attract a monthly interest charge of 2.89 per cent on the outstanding amount.

Other features

The usual perks that normally come with a credit card these days, such as a free add-on card, a balance transfer facility and insurance cover are also thrown in.

The bank creates a year-end statement summary, which classifies your spending under various heads, such as food, clothing and so on.

This could help you plan your credit card spending better.

Other interesting features include discounts of up to 3.5 per cent and 5 per cent on domestic and international flights for tickets bought through SITA World Travel. You also get a 15 per cent discount every time you rent a car from Hertz.

Suitability

Barring the flexibility to lower your credit limit, the Freedom Credit Card does not differ too much from any other.

If you already have cards and have mastered the skill of juggling your spending between them, this would just be another card for you.

But for a person not yet initiated into the big, bad world of credit cards, this could be a starting option.

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