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Credit card: Boon or bane?

Some of the individuals interviewed by Khaleej Times regretted buying credit cards, saying it proved a very costly error for them.

Talking about the credit cards salesmen, some of the residents used words like cheating, fraudulence, cunning, and dishonesty. They accused credit cards agents of tempting customers into purchasing their products without revealing the real charges that the cardholder will have to incur.

These salesmen are concerned only about their commissions, some of the residents said, urging the authorities concerned to intervene in the matter and save people from investing in cards without knowing the actual repercussions.

Banking experts, however, blamed the financial and banking institutions for relying on agents who live on commissions to promote their products, endangering the reputation of these organisations.

George Nicolas Abu Haider, a private sector employee, said he had a bitter experience with credit card. “I was cheated by a salesman who told me lies about the interest rates and membership fees. I fell in the trap because I was shown the only bright side of the bargain. However, I later discovered that I had been misguided. Ultimately, I ended up paying money to cancel the card,” he narrated.

Said Hamid Ibrahim Hassan, a government employee: “A salesman offered me a credit card without asking for any guarantees. I found the offer tempting, especially in view of the spiralling cost of living. The salesman convinced me to sign papers which carried information that was not disclosed to me. I was not briefed on the consequences of late payment. I landed in a big mess. I have vowed not to use credit cards again.”

Ashraf Salih, an architect at a private company said, “credit card agents know how to increase the outstanding limit earmarked for customers in order to hike the interests in a very deceptive manner, like allowing the user to make purchases from merchants or paying car insurance installment.”

Salih added: “Salesmen hide a lot of information from the customers. They do not portray a clear picture about the interest to be charged or the difficulties one might have to face in case of failing to pay on time. These people resort to all possible means to make you buy the cards.”

When contacted, a banking expert said banking institutions should not rely on hired agents to promote credit cards in return for a commission. “These people do not have a loyalty, and therefore, do not care about the reputation of the bank,” he pointed out.

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