The current cash crunch could be leading to overuse of credit cards which is the easiest way to get into debt forever.

Are Indians heading straight into the debt trap?

For those scores of people who have written in on Firstpost and elsewhere belittling the stupidity of the computer and app illiterates like myself and warmly suggested the option of credit cards as an option in this fiscal crisis here are some eyeopeners.

The current cash crunch could be leading to overuse of credit cards which is the easiest way to get into debt forever. As a poster-child for credit card debt, I had 14 of them with special privileges and charming perks and a VAT of poisonous charges that sucked out the marrow from my earnings month after month for years.

That this current crisis, if prolonged, will see thousands if not hundreds of thousands of middle class Indians who have so far eschewed the devilish temptation of the credit card with its baited hook of flattery drowning in extra charges, is a given. There is this fallacy that credit cards are a replacement for cash. No,they are not. Between fines, surcharges, penalties, delay charges and a slew of other levies these cards are pure evil and the demonetization action is directly encouraging their usage only to the advantage of the banks.

The ease of buying what you do not have to purchase by swiping credit cards and paying tomorrow in spades for what you do not need today coupled with the ropes of EMIs tying one down are a red flag warning that will not be heeded.

Don't do it. It is not smart. In fact, the Modi doctrine that has made these banks fat and sleek and loaded to the gills with funds should demand a moratorium on credit card repayment. Freeze the card and create a repayment plan without the penalties so that the Indian public is not flung of the fiscal cliff like an army of lemmings. Believe me, two months is more than enough to be trapped forever and a day.

One of the codicils should be that the frozen card holder pay off his debt and close the card. Do you know how many people have to pay again because they did not bother to get a letter from the bank confirming their credit card account at zero was closed.

There are just traps within traps. The banks best bet is to show you sunny people doing sunny things in brochures and ads and have you by the short hair.

Then comes the panic of paying off one minimum with another card and getting an extra card and loading that up and being at the receiving end of demeaning phone calls and insults and threats until the whole month is a noose of payment dates and collector’s messages.

One day late and they are on your case.

Those who are joyously using credit cards because there is this absurd mental imagery that because there is no immediate payment it is ‘free’ are looking at disaster and the general advisory in India seems to be propagating credit cards as the option to get out of the current mess.

It is time that the government reined in this runaway horse and made banks less hostile and aggressive or at least reworked their credit card concepts which now make usury come off like a walk in the park.

A credit card holder pays 30 percent a year and that is without the fines. That is higher than village moneylenders.

Modi’s government would be doing a huge favour and raking in a fair amount of money if it compelled a change in policy and if debts to banks on cards were allowed to be cleared like EMIs without mounting more charges unless there is a failure to comply. Let the banks also contribute their mite to the greater good.

The way it is now you could pay the minimum ten times over and still be no closer to clearing the face value of what is owed.

Watch out,India, before you become a discredited card.