Honey, they’ve shrunk my money

MUMBAI: How could they do this to me, Siddharth wondered aloud.

An MBA, fresh into his first job with a leading financial services provider, he was waking up to the harsh realities of life. It hadn’t been a month since he drew his first ever salary and already, his salary account showed a balance in double digits. It would be at least five days before the next salary was in.

But, it wasn’t the money he had spent that had Siddharth worked up. He had bought a little something for everyone in the family to mark the occasion, and even handed over a princely Rs 5,000 to his mother, as if to announce he had come of age. He had stood his friends a treat at a decent hotel, too, and blown some on a date. Still, all that was money well spent.

What took his goat were the debit entries in his online savings account almost every time he had used his debit card. He had withdrawn cash from the automated teller machine closest to his office five times.

The machine belonged to another bank. Though a friend had suggested that there might be charges on withdrawals from it, Siddharth had glossed over it thinking they were all connected and part of a common network. Also, it was so much more convenient than having to go looking for an ATM of his bank.

Now, as he pored over the slip, he knew those transactions had cost him dear - each was followed by a debit of Rs 55, a service tax of Rs 6.60 and education cess of Rs 0.20.

There, they had stolen over Rs 300 of his money, an amount that could have seen him through the next five days perhaps! As such, the debit card had bled him when he bought that cell phone for his sister and the gold earrings for his mother.

The cell phone brand-store owner had matter-of-factly charged an additional 2% on the purchase, asking him to go get cash if he wanted to save money.

And why? Because he had to pay the bank that had given him the swiping machine, the shopkeeper had reasoned. Proud not to show his hurt, Siddharth had gone through with the deal, shelling out an extra Rs 100 in the process. At the jewellery store, the charge was 2.5%.

Even the Railways wouldn’t spare him, when he flashed that card for getting a season pass. A Thane-CST quarterly pass cost Rs 1,450 instead of Rs 1,420. What’s more, a further deduction of Rs 33 was to follow in his account just days later, on account of this transaction.

And it wasn’t just foreign banks charging so much for swiping cards on their machines. Though the two shops did swipe it on the machines of two foreign banks, the Railways machine was from a very Indian bank, and a state-owned one at that.

What was the point of carrying a debit card, Siddharth now thought, if he had to surrender the gains from all that haggling and some?

Could a credit card have been any better? Sure enough, those charges on card transactions would have been made, but at least he could have benefited from the cash back offers going.

May be, but that might also mean he would end up spending a lot more than he needed to, thought Siddharth. Hadn’t he read so much about the debt trap consumerism was pushing people into, particularly the young?

The age of plastic money is some way yet, he thought, vowing not to walk into an ATM that didn’t belong to his bank, except under duress.

(The example is hypothetical)
m_subrat@dnaindia.net