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Credit Cards – Part 1

by | Jul 26, 2015 | Credit Cards, Finance

Some days back, I was buying something and paid with my Platinum HSBC card and I went down memory lane.

It was in the early 1980s that my parents decided to sell our 1RK flat at Worli for a then princely sum of Rs.25,000/- (by the way, it is now worth around 1.25cr) and buy a 1BHK flat at Santacruz for an unaffordable Rs.55,000/-.

All our savings were dipped into and every single rupee (and some gold) was put up for this project. The only help that was sought was from a close businessman friend who agreed to give my father the maturity value on some fixed deposits – otherwise we would have had to encash them prematurely and incur a loss of interest.

Never once did my parents think of taking a loan – the stigma of ‘karze mein dooba’ was simply too great.

Given this background and upbringing, how come I was nonchalantly borrowing money from a big corporation without even feeling a pang of guilt? For this is exactly what one does when one swipes a credit card.

It seems around the 1980s, some marketing genius came up with a brilliant idea – replace the word ‘loan’ – with all its negativity and evil connotations with ‘credit’. Whenever someone swipes a credit card, he or she is getting credit – for being smart and productive. Phrases like ‘credit for future earnings’ became common. What a successful campaign it was! It is said that personal debt rose over 200 times in the last 35 years or so. Really taking the ‘credit for future earnings’ part to heart, there are a lot of guys who manage to spend not only their future earnings but also that of the children!!

In fact, when one is offered a credit card by mail, the letter that accompanies it is carefully worded to somehow give an impression that the receiver is someone special with a huge earning potential and instead of waiting for years and earning the money before spending it, here is this corporation that actually believes in you and will let you spend it in advance!

But then I’m smart and I pay my bill in full at the end of the billing period, so in effect I use the company’s money interest free for a period of 50 days! Not so, say various consumer surveys.

To be continued…….

Niranjan Bangera
36 Properties Pvt Ltd

Life was a lot simpler when what we honored was father and mother rather than all major credit cards.
Robert Orben


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Written By: niranjan

Financially Stupid Niranjan


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