Sunday, August 19, 2007

Credit Card Tips

Since, I have written a lot about credit cards lately, I noticed that I haven't written about the type of factors you should consider when choosing a credit card. So, here are a few tips:

Grace Period:

A grace period is the time you have to pay your bills monthly before your credit card company starts charging you interest on the unpaid amount! This is one of the most important factors when considering a credit card from any bank. Firstly, you need to make sure that there is a grace period included, and secondally, for how long. Of course, the longer the better. Find out the interest rates, and the minimum amount you must pay on your credit card in the grace period.


Find out about any hidden fees with your credit card such as membership fees, annual fees, and specific transaction fees. You should be looking for a credit card with no annual fees but remember that this is not the only factor. Sometimes, credit card companies that don't charge annual fees often increase their interest rates!

Low Interest Rate:

If you feel that you would not able to pay your credit card bills within the grace period, then this could be the most important factor when choosing a credit card! Remember, the interest is charged on the amount that is not payed. So, make sure that you compare the interest rates of all credit cards.


Often, credit card companies will include benefits with your credit card such as free insurance or bonus points. Ask, the credit companies for these benefits.

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Thursday, August 16, 2007

Quick Approval for your credit card!!

Some people have contacted me complaining that either their credit card application has been rejected or it is taking too long!

Well guys, I have a solution for all new applications. But for this solution, you will need to have a few lakhs in your bank account! Here is what you do:

Go directly to the manager of the bank. Introduce yourself, including what you do. Talk yourself up! Remember, the idea is to impress the manager of the bank. But don't suck up to him. The trick is to show the bank manager that you are important and well respected in the community. Then, tell the bank manager that you really like his bank, and their services. For this reason, you would like to apply for a credit card for your business which you are about to start. Make up some software business. Tell the bank manager that "as the business has not yet started, you do not have any annual income but that will change in the coming months. But, you need a credit card urgently, as you make many purchases every month in India and overseas!" This will help convince the bank manager that you could be a valuable customer for the bank. Now here is the killer punch:

Show the bank manager your passbook and point out that you have lakhs of Rupees in your account. Make sure you show him a bank account with a lot of money in it. In fact, it can be a passbook of another bank! Point out to the bank manager that you would like to receive your credit card quickly. All going well at this point, the bank manager will most likely give you a credit card application, help you to fill it out, and will personally sign it.

Now, if the bank manager is still not satisfied then tell the bank manager that, for extra assurance, you will make a fixed deposit of 1 Lakh Rupees into the bank and that the bank has nothing to lose (don't do this, if you are not prepared to make a fixed deposit). And that should be it! Your application gets sent to their head office and since the bank manager can vouch for you, your credit card application is approved quickly!

Thursday, August 9, 2007

Insurance with your credit card!

Something that I just realised after exploring my Bank of Baroda credit card is that I get free accidental insurance with my credit card including Air Accident, Personal Accident, and Spouse Insurance. So, for example if you earn over 1.5 Lakhs per year, you qualify for a Gold credit card with Bank of Baroda. Now, with a Gold Credit card, you get
  • 15 Lakhs (1,500,000) of Air Accident Insurance
  • 7.5 Lakhs (750,000) of Personal Accident Insurance.
  • 2 Lakhs (200,000) of Spouse Insurance.
Also, you would qualify for Rs10,000 for baggage insurance in case you lose your baggage during air travel.

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Credit Card Bonus Point

I forgot to mention in my earlier post of Bank of Baroda credit card that every time you make a purchase, you earn Bonus Points. With my credit card, I earn 1 Bonus Point for very Rs.100 of the purchase amount. So, if I make a purchase of Rs.1,000, then I earn 10 Bonus Points on my credit card. Now, each Bonus Point is work Rs.0.50 paisa.

Then as I understand, it is possible to redeem your accumulated Bonus Points on your credit card with cash. I know that Rs.0.50 paisa per Bonus Point is not much but hey it is better than nothing! It would be interesting to compare this with others such as CitiBank credit card and ICICI Bank credit card.

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Credit Card in India

Just over a month ago, I got my Bank of Baroda(BOB) credit card and I am very happy with it. The approval process was quick and it only took about 2 weeks to receive the credit card from the date of the application! This is quite good since each application must go to the BOB Mumbai office for approval. There, a BOB representative will ring you and ask you some questions and verify some details. All going well, the credit card is sent through registered post at your home.

Generally to obtain a credit card, you need to have an annual income of 75,000 or more. Depending on high your annual salary is, you may qualify for a Gold credit card. You have the choice of Visa or Mastercard but really there is no significant difference between the two. The great thing about this BOB credit card is that there is no fee whatsoever provided you pay your bills in full all the time and you make at least 10 transactions per year.

Of course, there are times when you might want revolving credit - in which the customer does not pay the entire amount by the due date on their credit card. Still, you have to pay at least 5% of the total amount per month. So, if you made a transaction for Rs.1,000, then you must pay 5% of that (Rs.50) no matter what! The remaining amount of Rs.900 can be carried onto the next month but you have to pay interest on that. The interest is 1.99% per month on the remaining amount. Also, you have to pay service tax on the interest amount! Confusing? Well, remember that there is nothing to worry about if you pay all the bill amount per month as there is no fee on your credit card for lifetime!

Also, you can withdraw cash from your credit card but you have to pay hefty charges on the cash amount - about 2.5% of the amount. Generally, people do not withdraw cash from their credit card but use it for services and products at shops or on the Internet.

You can pay for the credit card every month via check or pay in cash at select Bank of Baroda branches.

So far, things have gone smoothly and I have used my credit card to make a number of purchases. Overall, a pleasant experience!

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Wednesday, August 8, 2007

Hughes Satellite Internet!

Well, as you many know from my earlier posts, Reliance is becoming unbearable with its slow speed. Now, unfortunately, there is only BSNL broadband in my area. However, BSNL broadband takes about 2 months to install. So far, I have visited the BSNL office 12 times but still they make excuses. Also, the BSNL service is unreliable.

For this reason, I recently contacted Hughes for VSAT Satellite Internet. I rang there switchboard and they gave me a phone number of a person who could provide more information to me. I rang this person about 7 times but no one picked up the phone. After informing the switchboard numerous times about this problem, they would simply say that they could not do anything and finally they hung up on me!!! Can you believe it? Here I am prepared to give these guys money to install the Internet and yet they are so unprofessional that they do not even have a proper customer care line!!

About 1 month later, I get a surprise call from Hughes asking me about my inquiry. Needless to say, I gave them a good bashing on the phone about their poor service. Now, as it turns out, Hughes are one of the largest providers of VSAT Internet. Of course, I was quite shocked!

VSAT Internet involves the installation of a satellite dish about 1.5 meter in diameter on the your rooftop. The dish directly communicates with the satellite in space and sends a signal back to your rooftop. Obviously, with VSAT, you can be sitting on top of Mount Everest and still access the Internet with high speed!

The cost of the rooftop satellite including delivery and installation is about Rs.60,000 which is a one time cost. The satellite comes with a 1 year warranty. Since, the price is quite high, I asked the salesman if I could rent the satellite. However, he declined saying that the satellite must be purchased.

Hughes have a number of Internet plans ranging from 256Kpbs to 768 Kbps speed. Now, the weird thing about these plans is that they include a download limit per day! Generally, Internet plans offer you a monthly download limit but Hughes only offers a specified download limit per day. This ranges from 50mb to 200mb per day. If you exceed the download, they would limit your speed. Of course, this is quite inconvenient since programs these days are quite large and downloading programs over 200mb would become impossible! The cost of these plans range from Rs.4000/month to about Rs.25,000/month depending on your speed and download per day.

Anyway, I am considering their offer and he said that there is room for negotiation on the price. Still, I feel quite exploited that I would have to pay Rs.4000/month for an Internet connection with moderate speed in this day and age not to mention the Rs. 60,000 for the satellite! But what can I do?

Monday, August 6, 2007

I got robbed outside of a bank in India

5 days ago, I was robbed outside of a bank in India. This is what happened:

I was coming out of my bank with a briefcase. The briefcase had my passbook, checkbook, and about Rs.10,000 which I had withdrawn from the bank. I reached my car which was parked outside the bank, and put my briefcase on the passenger seat. Just then, a man walked in front of my car and gestured to the ground as though I had dropped some money outside of my car. The man quickly disappeared away. Now, as I had just come from a bank, I thought maybe I had accidentally dropped some money outside. So, I went out my car, and searched around the car to see what had happened. There, I noticed that many Rs.10 bills were scattered outside of my car! Needless to say, I was shocked and confused since I did not remember dropping any Rs.10 notes. So, I bent down and started picking up the notes. When I stood up, I was still confused and looked around to see if someone might have accidentally dropped their money. Suddenly, it struck me that the man who was gesturing to the ground had purposely dropped the money outside and that my briefcase had been left unattended inside my car. Of course, when I frantically searched my car, my briefcase was gone!!! Astonishingly, this all happened within 20 seconds!

I quickly went inside the bank and notified the robbery. They told me that similar thing had happened before! I must say that they weren't very helpful but they did block my account and checkbook so that no money could be withdrawn from my account.

I then went to the police station and filed a report. It turns out that there were 5 other robberies that had occurred the same time I was robbed (possibly a large gang as the police told me). The entire police force was out looking for the culprits. About 30 minutes later, the police called my mobile and told me that my briefcase had been found! The money was gone but all the papers were still there! The police had found the briefcase lying on the side of the road near a hotel (some 3 kilometers from the bank).

Of course, there is no hope of recovering the money. I am very disappointed at myself that I let this happen. However, I guess I have learned an important lesson and it could have been much worse. The police were telling me that some people had lost Lakhs of Rupees. Thank god, I only lost Rs.10,000! It certainly won't happen again.