Struggling with Blocked Credit Card Bills: How Can They Charge Interest When I Can't Use It?

Dear All,

First of all, I am sorry for asking this question as I know this is not the right place to ask. But due to the situation I am in, I am compelled to ask.

I have been a credit card holder for quite a long time. My card was blocked over a year ago, and I have not been using the card for more than a year even before it was blocked.

The credit card company has continued to send me bills for the amount I owe, adding interest every month and asking me to pay either the total amount due or the minimum due. This has been happening since my card was blocked. (I have been paying the minimum due every month to avoid any unhappy incidents and disturbances.)

Now, my question is: How can the credit card company send bills to me when my card was blocked, and I am not using the card anymore? In such a case, how can they keep adding interest, sending bills for payment, and insisting on payment every month?

The fact is, I am not in a position to clear the full amount due immediately. I want to clear the entire amount slowly. However, the credit card company is charging interest on the total amount and sending bills every month. This way, I will never be able to clear my total amount due.

Kindly advise.

Regards,

Krishna

Dear Krishna T B R,

That's how credit card companies earn money! The interest will keep on mounting at an astronomical rate (more than 3% p.m. - which comes to more than 40% per annum when compounded every month; Also, there will be late payment/cash payment fees, service tax, etc., and again interest on all these components!

It is strange to find that RBI has not been able to rein in the credit card companies that charge atrocious and usurious rates of interest on the plea that these are unsecured loans.

In spite of having THE USURIOUS LOANS ACT, 1918, which prohibits excessive interest and the abolition of Zamindari and money-lenders; the government is yet to take any steps in this direction, though some thinking has already started.

All you can do under the circumstances is negotiate with the bank/credit card company to reduce the penal interest, which can be done as a part of the final settlement; if you are willing to pay in a lump sum, the outstanding amount including interest.

You can take a personal loan from some other friendly banks to repay the amount. The interest rate of this loan will work out to be much cheaper.

Hope the above suggestion helps you.

Do not feel sorry for asking this question. It is also the (moral) duty of HR to ensure that the employee is not chronically indebted; as it also leads to poor performance and attrition.

Warm regards.

Thank you, Raj, for your valuable reply. However, I doubt if any bank will give me a loan because they will go through my credit history before sanctioning or accepting the loan application. CIBIL is the source of information for all these people. Let me try; I hope things will work out.

Regards,
Krishna T B R