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Creditors' Catch

Question:Where can you find a multitude of young, well-heeled and fancyfree professionals always on the look out for the next purchase? The credit card sharks know the answer and it’s the software boulevards of India.

Print Edition: December 14, 2006

It’s past noon, activity is picking up outside the gates of a software firm. A bevy of people coming out of the gate to lunch at roadside eateries, to smoke their worries out and the rest to break the monotony of their office life. Mostly young, independent and financially empowered, they are chased by a posse of hunters-agents of credit lending institutions, fuelling dreams of the next iPod or a Pulsar.

What stupefies you is the fact that a once nondescript wasteland on the outskirts of Bangalore is now a centre of wealth, fuelling India’s growth. The country is fast filling up with these isolated centres of prosperity. Individuals working here are mostly away from families. They live off fat pay packets, have earning parents and in many a case with no dependents or responsibilities.

The credit lending institutions realise the presence of this honey pot and have been warming up to it. The IT yuppie today holds, on an average, two or three credit cards; those having none aspire to one as soon as they start earning.

He does not hesitate to display them either. From our fathers and uncles digging out hard-earned money from plastic bags during the family shopping spree to exclusive credit card wallets, the concept of splurging money has come a long way. No wonder banks and financial institutions are pulling out every trick in the trade to tap this source of wealth.

It starts with the creditors getting access to your phone numbers. Calls with superfluous conversations of being offered a lifetime free credit card with 60 days credit limit follow. The salary slip hardly matters if the company you work for is renowned. Some time later you are at your office gate where a direct sales agent guides you through the form filling formalities. Armed with a driving licence or a passport and a salary slip all that is required is half a dozen signatures on the form.

No one cares to read them. You may seek a reference number for your application but a mysterious process ensures you end up getting a credit card within one or two months provided you haven’t forged the documents.

You have, however, made your information accessible to the rest of the lending fraternity for further onslaughts. Once the card has arrived, it is ready to be used. For many it is a convenience—like those travelling at odd hours in an unfamiliar territory, it makes more sense to carry a credit card than a debit
card because of the cash withdrawal limit.

But those who are often misled into believing that it can change their lifestyles are often running straight into trouble. Bad debts follow for some, yet the bank or financial institution has made you a victim of your habit knowing that with a credit card in your hand you will tend to spend more. You can choose to put your house back in order, be less indulgent with a fair credit history or respond to the next call on your phone offering a personal loan from some other vendor to finance the debt you have to payback on your current credit card.

—SHARADH MANIAN

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