Credit card disputes: Small issues can snowball into major mistrust

Unresolved credit card issues can damage trust and hurt credit scores, making dispute management crucial

- Shipra Singh

Mumbai-based Yateen Kahate applied for Axis Bank's Magnus credit card in July 2023. Two months later, the bank revised the terms and conditions, raising the fee waiver threshold from ₹15 lakh to ₹25 lakh. Kahate was exempt from the revision for one year as the changes applied to cards issued after September 2023. However, his credit card statement in August 2024 shocked him. He was charged the annual fee despite spending ₹16 lakh—₹1 lakh more than the fee waiver threshold—in the year since his card was issued.

To be sure, all banks levy the annual fee on the first statement after 12 months from the date the card is issued. The customer has to settle the credit card statement, and the bank reverses the fee in cases where a fee waiver condition applies.

Kahate emailed the bank's customer care service, demanding an explanation. Instead of explaining to Kahate that paying the fee is the first step to asking for a fee reversal, the bank gave him an unexpected surprise. "The bank informed me the fee would not be waived as the waiver criteria was ₹25 lakh," said the finance professional.

"Over the next four months, I wrote to the bank's customer care service, nodal officer and senior management and lodged a complaint with the Reserve Bank of India (RBI) ombudsman. My dispute was finally resolved in mid-January," he said.

However, Kahate's problems are far from over. In the interim, when he was fighting the case, the annual fee-induced dues and interest over the four months severely dented his credit score.

He said: "I did not pay on principle as the bank owed me money, so why should I pay them more?"