P.B. Joshi took his first credit card three years back. Today, he has 11. Each time he touched the credit limit of a card, he would get himself a new one. Now, he is neck-deep in debt; he owes more than Rs 2 lakh, thanks to the bills the 11 cards have run up together
Amrita Sengupta has ‘only’ three credit cards but two personal loans. Both loans were taken to repay her credit-card dues. Her first personal loan succeeded in helping her settle the bills run up by the first two credit cards. She started spending again, and took another credit card. And then took another personal loan to help her save her credit-card blushes. She now has debts running into more than Rs 2 lakh again
A new ‘lifestyle disease’ has hit Calcutta. Joshi and Sengupta may be just two faces (with surnames changed) but they are representative of a growing number whose staid lifestyle, involving savings accounts in nationalised banks and post offices, have gone for a spin, thanks to the credit card.
The problem has assumed proportions menacing enough to give rise to a new concept in a city that, till the other day, saw a virtue in saving for the future. A debt-management firm — professing to help Calcuttans weather the new rules of spending — has made its foray into a hitherto virgin territory, and other bigger names are eyeing the response before making an entry, say market sources.
“Our message is very clear,” said Chayan Bhattacharjee, chairman and managing director of White Water East Projects, the first debt-management firm to spring up in the city. “We ask our clients to stop debts from ruining their lives,” he added.
The figures the firm has notched up could encourage the older players in financial management. White Water East Projects, a few months old in the city, already handles 150 clients, helping them juggle a combined debt of Rs 3 crore. “The figure is astronomical, as it means that each client on our list has, on an average, a debt of Rs 2 lakh,” an executive of the firm said.
Take the case of R.P. Sarkar, a clerk in a government department who has run to the debt-management firm to help him out. The credit-card and personal-loan spiral has ‘helped’ him notch up debts of Rs 1.3 lakh. He needs Rs 5,000 every month to pull himself out of the red, but does not earn enough to do that.
Saugata Mukherjee, a resident of Howrah, has been in that position. With credit-card debts of more than Rs 3 lakh and in a situation from which no debt-management firm would be able to rescue him, he has taken the only way before him; he has mortgaged his house to repay his loans.
Though GE (Countrywide) spokesperson in the city M. Hafeez would “neither deny nor confirm” the multinational giant’s entry into the market, market sources say bigger players like it are plotting their next move. “Professional debt-managers are the only solution in a scenario where people, not used to big spending, suddenly find themselves flush with plastic money,” an agent pushing credit cards for a multinational bank explained.
Officials in the credit card divisions of HSBC, HDFC and Indian Overseas Bank, however, refused to comment on it. “It is basically a client’s problem and we have nothing to do with it,” one of them said.