I hold a Citi Card (Visa) and have been using it regularly for almost past ten years. As such, I have not had any problem with the Card or with Citi Bank with regard to any of my transactions till recently. The story goes like this….
I had made a few purchases worth Rs. 2000/- on the card. The Statement against the said purchase was mailed to me on time. But due to various preoccupations, I missed the mail. The payment therefore could not be made on time. I realized this only after the receipt of the subsequent statement which was as it is of a hefty amount.
I decided to make the entire payment (outstanding as well as current) then and there without waiting for the due date which was somewhere in the middle of next month. However, while making out the cheque, I realized that the bank was charging me an interest @ 3.35% (40.2% annually) and a Service Tax @ 10.30% presumably on the default payment over and above the fixed late payment fees. But the amount reflecting towards these was exorbitant and did not fit into the calculation. On enquiry, I was told that the interest and Service Tax were charged on the current balance (the default as well as the current taken together).
I was appalled and sought to speak to higher authority. On being connected, I explained the problem. The girl on the other end informed that it was the policy of the Bank to charge the interest and Service Tax on late payment on the current balance as mentioned overleaf (ref. bill). I wanted to know whether the bank was charging the exorbitant interest and tax amount on the presumption that the customer would not be paying the current outstanding as well. I challenged the rule and told her that the Bank could not penalize a customer before the commission of the offence.
I had expected a prolonged debate on the issue but the girl acquiesced quite promptly and agreed to waive the interest and Service Tax on the current balance. But of course, I had to pay the same on the default amount. I agreed and the matter was settled.
This made me think. Had I not questioned the rationale behind the rule, I would have been taken for a ride. Also, every written rule is not law and cannot be enforced down the customer’s throat. Though, I am not preaching non compliance to rules, it is also a fact that we should not blindly follow a rule just because it is written under the heading “Terms and Conditions”. We should understand the logic and reason behind the rule. Perhaps certain rules are also made to intimidate the chronic errant customers.
Also, we, as customer, must also know how far we can challenge a rule or throw our weight around. Had I asked for a total waiver of late payment fees including the interest and the Service Tax, it would have been tantamount to taking advantage or asking for too much. Though, I suppose I could have, based on my flawless track record of ten years. But somehow I felt that I needed to pay some additional charge so that it would keep me on my toes to henceforth not to miss mail alerts and make payment on time