Comments
Aditya Dubey is a Mumbai-based professional working with a multinational company. He was holding four credit cards, of which two have been inactive for long. When the banks asked whether he wanted the cards cancelled because they were not used for over a year, Dubey decided to cancel them.
A month later, when he was accidentally checking his credit score, he realised that it had deteriorated substantially and the reason was some dues outstanding on credit card. Since Dubey had cancelled the cards, banks turned down the request to reverse the one-time charges. He could not work it out with the credit bureaus as well because they were insisting on communication from the banks to remedy the situation.
The big problem
Dubey is not alone. In the last seven months, several customers wanting to cancel their credit cards, inactive for over a year, are faced with this issue. “Initially, it used to be almost difficult to cancel a card. Now it seems like a punishment,” said a customer faced with a similar problem.
Apparently, since the request for cancellation of the card has been lodged into the system, customers are not intimated about the one-time levy, mostly card renewal charges, debited by the bank. Since this charge remains unpaid for over 30 days, the borrower or the card holder is reported to the credit bureau for default which subsequently impacts the credit score. As for banks, the charges are internally reversed because the card is deactivated though the reversal of the dues is not automatically flagged off to the bureaus. Hence the credit score which got impacted remains so.
No way out
“Trying to remedy the situation is almost impossible,” said another aggrieved credit card user, “because nobody is willing to offer a way out”. Since the customer is no longer the card user, trying to access the customer care call centre or branches is futile, especially for those who do not have any other line of relationship with the bank like a loan or deposit. As for bureaus, since they insist on producing a no-dues certificate from the banks for reversal of the credit score, which is an almost impossible task, bureaus are of little help in this matter.
In April last year, the Reserve Bank of India mandated banks to cancel the credit cards not in use for over a year. While some banks are reaching out to customers seeking their consent for cancellation, most banks don’t initiate the process with communication coming from the customer.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.