The Times, They are a-Changing III (Of Credit Cards)

My first credit card in the mid-80s was a gift from my Dad, an add-on to his Citibank Diners card. It felt nice to possess one, since I seemed to be the only one among my friends to have one, but its utility was extremely limited. Those were the days when cards were accepted only in fancy restaurants and big, expensive shops, which I couldn't afford to go to anyway, and there were no swipers, only manual Bradma machines and the cards were valid only in India and Nepal. It was in the US in the mid-90s that I understood the power of a credit card. We managed to get our credit cards within three weeks of our arrival; we learnt later that we had been extremely lucky, since it often takes many months to get approved for credit cards. A friend of mine who had been there for over a year still didn't have one, since she did not have a credit history and the catch was that without a card she could not build a credit history.

We used our cards throughout our stay; in grocery stores, in the malls, to book rail and plane tickets over the phone, to join mail-order music CD libraries, to rent cars and to withdraw cash from ATMs. Within six months, our credit history announced to the credit world, that we were reliable, honest people who used credit cards and paid back in time and soon other banks started sending us their credit cards by mail, at the rate of one new card a fortnight. The cards came in different colors and designs and we started collecting them as memorabilia. When we returned, these cards all turned into useless pieces of colorful plastic. Though we carried all our precious credit cards back with us, we soon realized that there was no way we would be able to use them, since these cards would be billed in the US and it was legally not permissible to operate a US bank account from India.

Before we went to the US, we had explored the idea of applying for an international card from Citibank, the only bank giving international cards at the time. This would have helped pay many of our expenses from India itself. They however wanted a 10,000$ (at the time, Rs 320,000) deposit. If I had that kind of money to put in a fixed deposit, I wouldn't have needed to bother in the first place.

One of the biggest thrills of using a credit card in India in the mid-90s was the access to business lounges in the major metro airports. Though my Citibank Classic card was not valid in these lounges, I was able to use it anyway since nobody really checked, until one fine day my luck ran out and an overzealous lady threw me out of the Chennai lounge. Though, a Citibank Diners card was valid in these lounges, I had stopped using this card because of its high annual fee of Rs 3000. I then got myself a Stanchart Gold to prevent getting thrown out again. You still could not use any of these cards internationally or on the net.

Sometime in the mid-90s, many Citibank Diners cardholders were given the option of a Citibank International card for a 100$ per year fee; they discontinued this scheme within a year for reasons unknown (though I believe that the main reason was the sudden increase in charges from 1-900 phone sex services), but my father managed to get hold of one (the card, silly) just in time. There were stringent RBI guidelines regarding the use of this card; you had to use it outside the country and payment had to be made using a dollar draft obtained from a local bank. This card was our first true entry into the global card club and we used it to pay for journal and conference subscriptions as well as for my first net-based transaction in 1998. Though net usage was a gray area at the time, Citibank never said anything and we never asked for clarifications. I also used it on a couple of foreign trips to make phone calls from pay phones since no physical or signature verification was required for these transactions. The rest of the local cards were still not usable internationally.

In March 1999, we had to travel to Europe. I went to HSBC, which had started issuing international cards and using my company's backing managed to get one. I immediately tried to use it for a net transaction and the card was rejected. When I called the bank, they said that the card was not approved for online net transactions, for security reasons (meaning restriction to pornographic sites). My first real use of the card was to buy train tickets from Charles de Gaulle airport to another station near our hotel. The transaction went through and we felt great. Two hours later we went to a restaurant for lunch; I gave my card to the waiter with a flourish, only to have him come back within minutes exclaiming loudly, "No good, no good", converting our "cool international" image to one of extreme embarrassment. Throughout that trip, the card worked at its own sweet will; sometimes the transaction would go through, sometimes not. I called the bank from Lucerne and they gave me some gobbledygook about different levels of clearance. The best part though was in Vienna, where most stores had only Bradmas and no swipers and we could use the card almost everywhere.

Three months later, in the middle of 1999, Stanchart came out with its international card offer and my Stanchart was automatically converted. When I asked around, I found that in December 1998, the RBI had issued a directive, allowing the free use of international cards, not just abroad but also from India for journal subscriptions and net-based transactions, though Stanchart itself did not clarify these issues. For the first three months Stanchart insisted on a complicated method of payment involving the issuance of dollar drafts by the local bank, but within three months this too was dropped and rupee payments were allowed. Citibank and HSBC followed suit, and were joined by American Express sometime during the latter half of 1999. The day I got my new Stanchart, I used it on the net and the charge went through like a dream. No hiccups. In January this year when I traveled to Europe, I was able to use both my cards, the Stanchart and the HSBC freely without the slightest hitch.

A small thing this, but it makes you feel that you have arrived; a pitch that Stanchart successfully used in its ad campaign. Sure, there are still a few problems. The credit limits are way too low. You still have to abide by the RBI rules and adhere to the allowable foreign exchange for the year. Online transactions are still difficult within India. But imagine the advantages; no traveler's cheques, no hassling with moneychangers, no anxiety of running out of cash in an emergency, the ability to subscribe to journals without having to mail or courier dollar drafts that may get stolen, and the ease with which software or books can be bought off the net.

"Door aaye, durust aaye", this Hindi phrase says it all. A little late in the day, but so what!