If you had been in a celebratory mode after the National Consumer Commission's judgement, restraining banks from charging high credit card interest rates, it's time to stop. Though the commission had ordered banks not to charge more than 30 per cent a year from credit cardholders who had failed to make the full payment on the due date, the Supreme Court had stayed the order. Recently, the court was approached by the NGO that had petitioned the commission to direct the banks not to charge exorbitant rates beyond the benchmark. However, the court has refused to interfere with its previous decision.
The high interest rates came into focus last year as defaults on credit card debt rose 50-70 per cent. According to the banking ombudsman, complaints by customers regarding overcharging and issuance of unsolicited cards shot up by 74 per cent during 2008-9. Credit card companies, on the other hand, say they have no choice but to charge high interest rates as there is no collateral against defaulters and the lethargic pace of court action is a deterrent to any legal challenge.
