What should you do if you have too many credit cards?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A credit card is a great financial tool. It allows you to buy the stuff you need by providing you instant credit during a cash crunch. If you play it smart, you can manage your finances better by leveraging the various features of a credit card. However, if you’re not careful, you can get buried under a pile of debt that can make your life very difficult.

Sometimes, however, people get too enamored with the offers and end up getting a lot of credit cards, which causes problems for them down the line. If you are in a situation like this, you may find benefit from the following advice.

Why shouldn’t you get too many credit cards?

How many credit cards one person should own depends on their financial situation and spending habits, but as a general rule of thumb, it’s not a great idea to get too many credit cards unless you’re super-wealthy. Here’s why:

You may not know how credit cards work: Oftentimes, users are not aware of how exactly the credit cards work and end up overusing their cards without doing any kind of research. This could be a recipe for disaster.

More credit cards mean more debt: The greater the number of credit cards you have, the greater will be the debt. Remember, when you buy something from a credit card, you’re paying by borrowing money from the bank. If you fail to make those payments on time, not only would your credit score take a hit, but your outstanding balance will also accrue interest. A smaller number of credit cards will let you manage your payments easily.

Managing cards could be a pain: Different types of credit cards have different advantages. But if you have too many credit cards you may lose track of which ones should be used for which types of spending.

Don’t be swayed by heavy discounts: Credit card vendors, sometimes, offer great discounts on cards which may be tempting, but this is when you need to keep your impulses in check. If you already have a credit card or two, you shouldn’t think about getting a new one unless you’re extremely cautious with your payments.

Hard credit inquiries may lower your credit score: Every time you apply for a credit card, the hard inquiry will lower your credit scores a bit. Therefore, it is recommended that you refrain from applying for several credit cards in a short span – especially if you’re not sure whether your card will be approved or not.

Overall, it’s all about mitigating the risk that comes with getting a credit card. As long as you’re responsible with your finances and you aren’t overspending, you should be fine. However, even if you are managing your finances efficiently, you shouldn’t get too many credit cards.

How many are too many?

Many people seem to believe that the greater the number of credit cards they have, the better will be their credit score. It isn’t always the case. It has more to do with how you use your cards than how many cards you own.

That said, there is a benefit of having multiple credit cards – it is the availability of credit. The greater the number of cards you have, the higher your credit limit. It is a good strategy to keep your utilization ratio low; however, you can mess up real fast by maxing out your credit cards.

If you’re failing to manage your credit cards efficiently, you may need to close the cards as the last resort.

When should you close a credit card?

Several situations warrant closing a credit card. Let us take a look at them.
High fees: Many credit cards come with high annual fees and if they’re not delivering the value that you desire, you should probably consider closing them.

Issues with the issuer: There can sometimes be problems with the card issuer that may force your hand to close the card. Unexpected charges or concerns regarding the way your payments are being processed are a couple of reasons that may make you think about closing a card.

You want another signup bonus: Some travel cards offer signup bonuses which can be availed every one or two years. If you’ve used your signup bonus and you want another, you may close your card and apply for it again.

If you’re troubled by the high annual fees but don’t want to close the card, don’t worry; there is a way. Some credit cards can be downgraded, which means that they won’t attract any annual fees. It is definitely something to consider.

In theory, as long as you’re managing your finances carefully, it doesn’t matter how many credit cards you own, but it is always smart to start with just one or two until you get a hang of things.

The author, Rachit Chawla, is CEO and founder at Finway FSC. The views expressed are personal

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Who is Alka Mittal, the first woman to head ONGC?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-run Oil and Natural Gas Corporation (ONGC) has appointed Alka Mittal as interim chairman and managing director of the oil behemoth. With this, Mittal becomes the first woman to head India’s largest oil and gas producer.

Mittal is currently Director of Human Resources at ONGC. She will replace Subhash Kumar, another interim who retired on December 31.

Mittal has been assigned additional charge for a period of six months from January 1 or till a regular CMD is appointed, the Department of Personnel and Training (DoPT) said in an order on Monday.

Who is Alka Mittal?

Mittal did her post-graduation in Economics, MBA in human resource management and doctorate in commerce and business studies. She joined the energy major as a graduate trainee in 1985.

Earlier, Mittal was in charge of ONGC’s Chief Skill Development (CSD) where she is credited with bringing in uniformity in the working of all Skill Development Centres across the country. She was instrumental in implementing the National Apprenticeship Promotion Scheme (NAPS) in ONGC, which engaged over 5,000 apprentices across its network. Prior to that, Mittal held the post of Head – CSR at the ONGC corporate office.

Mittal has performed HR-ER functions in various capacities in Mumbai, Delhi, Vadodara and Jorhat offices and was also posted as the head of corporate communications in 2009.

Apart from ONGC, Mittal is also an executive committee member of the National Institute of Personnel Management (NIPM). She also held the post of president of Forum for Women in Public Sector (WIPs) northern region.

Since August 2015, Mittal has been on the board of ONGC Mangalore Petrochemicals Limited as ONGC nominee director.

Breaking the glass ceiling

Mittal broke the glass ceiling when she became the first woman to join the ONGC board on November 27, 2018. Pomila Jaspal, who has been selected for the post of director (finance) of ONGC, is another woman employee who will join the energy major’s board soon. At present, Jaspal is working as director (finance) of ONGC’s subsidiary, Mangalore Refinery and Petrochemicals Ltd.

Other woman leaders

In 2014, Nishi Vasudeva became the first woman to head an oil company when she took over the reins of Hindustan Petroleum Corporation Ltd (HPCL), an oil refining and fuel marketing company.

Vartika Shukla is currently the head of public sector unit Engineers India Ltd (EIL). Shukla was appointed chairperson and managing director of the engineering consultancy firm on September 1, 2021.

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Omicron scare: Mumbai Mayor warns of lockdown if daily COVID-19 cases go over 20,000

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mumbai Mayor Kishori Pednekar on Tuesday said if the daily COVID-19 cases cross the 20,000 mark, a lockdown will be imposed in the city as per the Union government’s rules. Talking to reporters at her office in the Brihanmumbai Municipal Corporation (BMC) headquarters, Pednekar suggested that citizens wear triple-layer masks while travelling in public buses and local trains. She also appealed to them to get vaccinated at the earliest and follow all COVID-19-related standard operating procedures (SOPs).

Maharashtra Chief Minister Uddhav Thackeray might address the citizens in a couple of days, she said. To a query, Pednekar said the BMC will carry out RT-PCR tests of people returning from Goa by a cruise ship and quarantine them at civic centres, or in hotels if they are ready to pay for it. Notably, the cruise ship, where 66 of the over 2,000 people on board tested positive for coronavirus, was sent back to Mumbai from Goa late Monday night with all the passengers after some of the infected persons refused to get admitted to a medical facility there, an official from a shipping agency said.

The mayor said BMC Commissioner Iqbal Singh Chahal has been keeping a close watch on the situation, and he has already hinted about the lockdown, if the COVID-19 cases in the city rise over 20,000. “Today, no one wants a lockdown and it certainly shouldn’t be imposed, as just now everyone is recovering from it. If the lockdown is enforced again, it will badly affect everyone. But, if the daily COVID-19 cases cross the 20,000 mark, a lockdown will be implemented by the civic body and the state government as per the Union government’s rules,” Pednekar said.

She appealed to citizens to follow COVID-19-appropriate behaviour, avoid overcrowding in markets, malls and marriage functions, and wear masks properly. The mayor also appealed to people to hold marriage functions as per the rules, and ensure such events do not prove to be COVID-19 super-spreaders.

She said currently, only six Omicron patients are admitted in Mumbai hospitals and all other persons infected by the new COVID-19 variant have been discharged. Mumbai is witnessing a huge surge in COVID-19 cases since the last week.

On Monday, the country’s financial capital reported 8,082 COVID-19 cases, the highest daily count since April 18, 2021, taking the caseload beyond the eight lakh-mark, while two more patients succumbed to the infection, the BMC earlier said. Mumbai also reported 40 new cases of the Omicron variant, pushing the number of such infections to 368 in the metropolis, according to the Maharashtra government’s health department.

With fresh additions, the city’s coronavirus tally rose to 8,07,602, while the death toll increased to 16,379 on Monday, as per official data.

For all the latest updates on Coronavirus, click here. 

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Why buy now, pay later has become preferred choice among millennials?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As millennials hit their prime spending years, their buying patterns will create the next wave of changes in the financial world. Nowhere is this more evident than the payment industry that has undergone a paradigm shift in the last few years. From cash-only to credit cards, the industry is now swiftly pivoting towards digital payments that depend on less cash and physical cards.

In fact, digital payments have emerged as one of the fastest growing segments in the high-growth fintech industry. With more than 40 billion transactions worth over quadrillion rupees , the digital payment industry has emerged as a leading player in the sector.

In keeping with its innovative nature, the latest trend in the industry is the ‘Buy Now, Pay Later’ or BNPL model. Similar to a credit card payment method, BNPL offers the user even more convenience. Targeted at the digitally-savvy millennial generation, it has garnered increasing uptake among online merchants. As a user-friendly, low-commitment payment mode, it is now expected to be the dominating trend in the next few years as more millennials adapt to digital payments and no need to transfer/load wallets.

How it works

BNPL works similar to any credit based payment, such as credit cards. Typically associated with digital payment platforms, it allows buyers to buy a product or service and pay it later as a lump sum or in installments. Under the model, a digital payment platform offering BNPL services, ties up with a merchant, such as Amazon, Flipkart, Zomato, or Swiggy.

Buyers can opt for the BNPL mode at the time of purchase. Most platforms do not charge any interests if the payment is completed within the stipulated time frame.

Improving user experience

BNPL’s biggest USP lies in its ability to improve the user experience, making payments smooth and easy, starting from customer onboarding to the repayment process.

Easy onboarding: It is this feature that puts digital BNPL services above the credit card payment system. Credit cards are typically issued only after due diligence that can involve tedious documentation. In contrast, digital payment vendors have a smoother app based onboarding process where the vendor may look at past user behaviour or ask for basic details such as Aadhar or pan card

User experience: BNPL is also a significant step up in terms of user experience. Credit card payments, even when conducted digitally, require the user to fill in credit card details followed by authentication which usually relies on OTP generation. In comparison, BNPL platforms have a shorter transactional process. These platforms are integrated with the merchant vendor and payment requires the user to use a pre-set password. With fewer steps, it fulfills the basic requirement of improving UI for any product.

Easy payments: These platforms are emerging as industry specific targets and offer easy repayments.. The format makes it easy for a buyer to make a purchase even if they don’t have enough funds at the time and make repayments later.

The way ahead

Currently, BNPL payments are limited to small ticket purchases and slowly getting in to large tickets. As a nascent industry, the payment models are still developing and regulatory is also evolving around. However, as it takes hold, one can expect easy credit for larger tickets, allowing payment values similar to credit cards. The biggest driver for the industry is millennial buying behaviour which increasingly relies on digital modes. Digital payments like BNPL can be carried out on one’s phone, removing both cash and credit cards.

Digital payments received a further boost during the pandemic with 68% of Indian consumers now preferring online payment routes for financial transitions . One survey revealed a clear preference for UPI and online wallets over cash or credit/debit cards among millennials . In a country with a very low credit card penetration of 3.3 percent, BNPL players can play a crucial role in extending easy credit for buyers.

However, one of the concerns here is the delinquency ratio or the number of people who are likely to default. Most payment platforms and vendors are betting safe with low value and high volume transactions. However, as the industry evolves and we have more data and better insight into consumer behavior, digital platforms will be in a place to extend bigger loans and lower interests in case of late payments.

Ultimately, the adoption of BNPL as the dominating installment pay mode is most likely because of the quick adoption of digital platforms and its potential as habit-forming. As more millennials use their phone as their default paying mode, more and more people will switch to BNPL instead of reaching for their credit card or going through the cumbersome process of applying for a loan.

The author, Guhan Muthusamy, is Co-founder and Software Architect at Mindgate Solutions

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India spends record $55.7 billion on gold imports in 2021

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India splurged a record $55.7 billion on gold imports in 2021, buying more than double the previous year’s tonnage as a price drop favoured retail buyers and pent-up demand emerged for weddings that were delayed when the pandemic first hit.

The previously unreported details of the world’s second biggest consuming nation’s soaring imports were disclosed to Reuters by a senior government official who requested anonymity as he was not authorised to speak to media.

The 2021 gold import bill easily doubled the $22 billion spent in 2020, and surpassed the previous high, set in 2011, of $53.9 billion, according to the official, who tracks broad import trends.

In volume terms, India imported 1,050 tonnes of gold in 2021, the most in a decade, and far more than the 430 tonnes imported in 2020, the official said.

While global bullion prices drew support from the strong demand in India, the outlay on imports would have added to pressure on the country’s ailing rupee.

“Last year demand was robust as lots of weddings were postponed to 2021 from 2020 because of the coronavirus outbreak,” said Harshad Ajmera, a gold wholesaler in Kolkata.

Indian authorities imposed strict lockdowns during the first waves of the pandemic in 2020, hitting gold demand during the wedding season and key festivals such as Akshaya Tritiya, when buying gold is considered auspicious.

Gold is regarded as an essential part of the bride’s dowry in India, and is also a popular wedding gift.

Ajmera noted a price correction had made gold more affordable for retail consumers in India early last year

Local gold prices hit a record high of 56,191 rupees ($754) per 10 grams in August 2020, but fell back to 43,320 rupees in March 2021, when monthly imports spiked to a record 177 tonnes.

In December India imported 86 tonnes of gold, slightly more than last year’s 84 tonnes, the government official said.

Gold imports could moderate in January as rising coronavirus cases have prompting local authorities to impose restrictions, said a Mumbai-based bullion dealer.

“Jewellers are afraid of lockdown. They have scaled down purchases,” the dealer said.

($1 = 74.5100 Indian rupees)

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21-year-old student from Bangalore detained in ‘Bulli Bai’ app case; what we know so far

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A 21-year-old engineering student from Bangalore was detained by the Mumbai police cyber cell on Monday for questioning in connection with the Bulli Bai app case on Monday.

The police have also registered a first information report (FIR) against unknown persons based on complaints against the app.

Earlier, a case was had been registered against the developers of the Bulli Bai app and Twitter handles that promoted the app.

The Mumbai Police refrained from revealing the identity of the suspect from Bangalore, except his age.

What is the Bulli Bai app about?

A controversial app surfaced on the hosting platform GitHub on January 1 displaying doctored photos of influential women from the Muslim community, including journalists, social workers, students and famous personalities. The photos were accompanied by derogatory taglines.

On Twitter, the app was being promoted as @bullibai. The account carried a display picture of a “Khalistani supporter” and said women could be booked from the app.

The app is similar to the ‘Sulli deals’ app that had surfaced in July last year which was also hosted on GitHub.

Following outrage on social media, the app was taken down.

What did the app do?

The doctored photos of Muslim women were illegally picked up from their social media accounts and uploaded on the app to convince people to take part in an “auction”.

The complaint

A woman journalist with an online news portal lodged a complaint with the Delhi Police cyber cell against the Bulli Bai app. In her complaint she said the term ‘Bulli Bai’ was disrespectful and the content of the app was clearly aimed at insulting women from the Muslim community.

“Bulli is used exclusively for Muslim women and the entire website seems to have been designed with the intent of embarrassing and insulting Muslim women,” the complaint read.

The complainant said her image was being displayed “in an improper, unacceptable and clearly lewd context” on the app, The Times of India reported.

According to Hindustan Times, the journalist’s image was being sold on the app as the ‘deal of the day’.

Both Mumbai and Delhi police have lodged FIRs in the matter under relevant sections.

Uproar

Priyanka Chaturvedi, Rajya Sabha MP representing the Shiv Sena, flagged the app to Mumbai police and asked the Union Information Technology Minister Ashwini Vaishnaw to take stern action against the perpetrators.

Vaishnaw confirmed on Saturday the GitHub had blocked the user of the app and said the police and the Indian Computer Emergence Response Team were coordinating further action, although he did not elaborate on the action being taken.

On Sunday, he had tweeted: “Govt. of India is working with police organisations in Delhi and Mumbai on this matter.”

Meanwhile, Congress leader Shashi Tharoor tweeted that the police should take action against those who were trying to “sell” people online. “The perpetrators deserve exemplary and condign punishment,” he wrote.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow