It is not only the ‘Golden Key’ that squeezes their clients or card holders to extract the ‘juice’ from the unsuspecting patrons; there are other operators as well; they do it in a more sophisticated manner so that it goes unnoticed. In settling my previous month’s statement, I have inadvertently paid a little less than [...]

The Sunday Times Sri Lanka

Credit Card companies fleece clients

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It is not only the ‘Golden Key’ that squeezes their clients or card holders to extract the ‘juice’ from the unsuspecting patrons; there are other operators as well; they do it in a more sophisticated manner so that it goes unnoticed.

In settling my previous month’s statement, I have inadvertently paid a little less than the total due for the month, as against the usual rounding-off by me to a figure above the total due. The amount I settled was well above the minimum due as stated. On receipt of the latest statement only I realised my error, but was surprised to learn that they have charged a late-payment at 28 per cent p.a., exceeding the customary rates of interest; and believe me for the total bill amount, meaning the amount I had already paid included too. These are like blood-sucking Afghan money lenders of yesteryear that my father spoke of decades ago.

On checking with the company, they indifferently responded saying that’s company policy. If I may quote an example, the same I presented to them for clarification; it works like this.

=If your bill outstanding is Rs. 100,000 even if you make a part payment of say Rs. 99,999 leaving a balance of only one rupee, they would calculate the late payment at an exorbitant rate of interest 28 per cent p.a. [today the interest rates have dropped down to lowest levels] on the total amount of Rs. 100,000 and bill you a monthly interest of Rs., 2333/33 on your next statement. By any chance if you fail to settle the one rupee for one year you are liable to pay princely Rs. 28,000 as interest on it!

Furthermore, as the payment conditions stipulated at the bottom of the first page of statement, and printed in black and white says; * Extract:”If only the minimum payment is made, interest will be accrued at 28 per cent p.a. on the balance amount.” On the reverse of the statement it says,
Extract: Interest Calculation Method Adopted by … . plc. on Credit Cards Important points

1.Interest is charged only on unsettled balance

But here we are paying much more than the minimum as given, only a little less than the total, therefore the balance amount should be the difference of the two. If they are so nasty let them charge the monstrous rate of interest that nowhere in financial world imposes today, on the actual unsettled amount.

The authorities in the Central Bank should immediately intervene on this matter, unlike in the GK case, waiting for the horse to bolt out of the stables.

K.K.S. Perera
Panadura
kksperera1@gmail.com

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