Why would there be a debit in a life-time free credit card?
There are a number of reasons for a debit to your life time free credit card. Let us look at some of them.
- Firstly, the life-time free only applies to annual maintenance charges. All the other charges will continue to be debited. Apart from monthly interest, you will be debited with GST, late payment charges, charges for special requests, EMI conversion charges, foreign currency transaction charges, cash withdrawal charges etc.
- Many cards offer chargeable upgrades. For example, you may be having a gold card and the executive at the call centre may have offered you an automatic upgrade to platinum. You would have accepted the upgrade, not knowing that the life-time free offer is not available in the new card. Upgrade charges could be applied in this case.
- Quite often, the credit card issuer changes the terms of the card issue. For example, a bank may have launched a co-branded card, which may have been issued with life-time free promise. If the co-branding agreement comes to an end, card issuers have a clause wherein these benefits are automatically withdrawn.
- It is also possible that the credit card company may unilaterally withdraw such offers and discounts as it may be finding it hard to keep the business financially viable. In such cases, the bank may intimate you about such withdrawal and effective immediately the enhanced charges will start to apply.
- Finally, don’t forget to read the fine print. For example, many banks insist that the life time free will be applicable only if you spend above a threshold in the first 3 months. If you don’t, the facility may be automatically withdrawn and you will be debited the annual charge. In some cases, the bank debits the charge with the GST at the beginning of the year and at the end of the year they reverse the charge if annual spend is above a threshold. At times, the card issuer may not reverse but add to your reward points. These are fine print issues you must be familiar with.
To begin with, it is always best to scour your credit bill each month in detail to locate such charges. A much better way is to have the credit card app downloaded on your mobile so that you get real time updates of any such debits. Despite all these checks, you may find charges debited. Here is what you should do.
- If the charge is genuine, then it is fine. However, if it is on account of your misreading of the fine print, you can call the bank and tell them to shift you to a card where there are no such charges applicable.
- There is another way of handling this issue. You can tell the issuer that you are unhappy with the charge and would prefer to close your current card and shift to another bank. In a competitive world, most card issuers will go out of their way to keep you happy.
- In case you find that the charge is out of sync with what the bank has promised, you must immediately get in touch with the credit card call centre and officially file a complaint and ask them for an explanation.
- Generally, the issuer is willing to reverse the charges if they have made a mistake, but the onus is on you as the card holder to highlight such discrepancies and bring it to the notice of the bank immediately.
If the card company still does not give you a satisfactory response, you can escalate the matter to the head of the credit cards department and mark a copy to the compliance officer of the bank and the CEO of the bank. Normally, banks and credit card issuers have a reputation to protect and they would not risk too much of negative publicity, especially if you have a genuine case for a reversal.
However, if you feel that there is no response, you can just adjust the additional charges and pay the balance amount and ask for the card to be closed. This normally goes into dispute but the card company will soon close out the card in such cases.