Credit Card Issues in India

Living abroad and not using a credit cards is highly unlikely. As an expat living in India you may use your foreign issued credit card or have your very own new credit card issued in India. Both offer convenience of use in certain situations; however care should be taken by being proactive on certain credit card issues in India.

Using a Foreign Issued Credit Card in India:

Issues such as non-acceptance of the credit card by the merchant or extra transaction fee may be evident while using a foreign issued credit card in India. This is because majority of the credit card machines in the rural and not so developed parts of India still do not use the smart chip credit card technology installed in your foreign credit card. The best way to go about checking this is to inquire beforehand if the merchant accepts VISA or MasterCard.

The extra transaction fee varies from bank to bank and can be as high as 5 dollars per transaction. The more transactions you make, the more would be your credit card processing fee on your foreign issued credit card. On the other hand, using your foreign issued credit cards for obtaining rupees through authorized money changers might be a less expensive option.

Using a Local Issued Credit Cards in India:

Ignorance of terms of usage and interest rate charged is the number one concern for many expats using local issued credit cards in India. The best way to stay safe from such credit card hidden costs is by being aware of what you are getting into. Read the terms thoroughly, go through your monthly credit details and try to pay on time without suffering from a credit debt.

Fortunately the Reserve Bank of India (RBI) has taken action on credit card hidden costs and has made all Indian banks liable to disclose FULL terms of credit card usage in simple language and prominent text. Also, according to RBI new regulatory guidelines, any change in interest rate whatsoever has to be conveyed at least a month earlier before enforcement.