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Safe and Secure Usage of Credit Cards

Statistics indicate that the Credit Card habit is widespread and cards are being used by more and more people of all segments of the society. If safe and secure usage of the credit card is not properly understood, a cardholder could face difficulties, some of which may be difficult to resolve. This article serves to educate card holders on the care they should take in keeping and using the credit card, the pitfalls they should avoid and information they should familiarize themselves thoroughly with, especially since the credit card has become a very convenient and popular instrument to obtain cash and credit.

Credit Limit

Cardholders must clearly understand the dangers of applying for and obtaining a credit limit which is far above their capacity to service. Whilst holding a ‘Gold Card’, for example is considered a status symbol, it provides a higher credit limit which a cardholder would be tempted to utilize for purchases far beyond what can be afforded, purely since ready credit is available. It must also be remembered that holding several credit cards and supplementary cards multiplies the total limit available which if imprudently used could easily lead to financial distress. For the same reason card holders must be cautious in accepting unsolicited offers to increase the credit limit and if such increases are done without reference, the card holders have the right to request for a lower limit which is within their capacity.

Security of Cards/Personal Identification Number (PIN)

The cardholder should safeguard and protect his/her credit card from theft and misuse by any other party. Several instances had been reported where such cards have been used without the cardholder’s knowledge by family members, colleagues, etc. Therefore, the card should always be kept safe in a secure location where it will not be accessible to others. The PIN and the card should never be stored together since without the PIN a stolen card cannot be used to draw cash. Cardholders should ideally memorize their PIN and destroy the PIN advice immediately or record it in a place which is known only to the card holder. The PIN should never be written down on the card. Instances have been reported where, for convenience, certain cardholders had given their card and the PIN to third parties to draw cash from ATM’s. It is important to understand that a withdrawal through an Automated Teller Machine using a card with correct PIN is considered as a valid withdrawal.

Transactions also could be charged to the cardholders credit card account with the use of his/her card details where physical card or signature is not required (Card Not Present transactions such as internet, mail order, telephone order transactions). It is therefore important not to share credit card details with third parties.

Theft or Loss of Card

If a credit card is lost, it should be immediately reported to the relevant card centre since any transaction that may have been carried out using a lost card prior to the loss being reported will be the responsibility and liability of the cardholder. It is suggested that the contact numbers/hotline of the relevant card centre be noted for use if and when necessary.

Terms & Conditions

Every cardholder must familiarize himself/herself with the relevant terms and conditions when entering into a credit card relationship with the issuing bank, so that the card holder understands the implications of being a card holder.


Every cardholder receives a monthly statement which clearly indicates the transactions carried out during the relevant period with dates of transactions, where the card was used, the rupee amount, the stamp duty payable to the Government on the transactions and the minimum payment and the due date. If a cardholder does not receive the monthly statement, it is advisable to communicate with the bank since the cardholder is anyway liable to make payment on the due date or face the consequences of delayed payment. If either the minimum payment or any higher part payment is made on or before the due date, the account is considered a regular credit card account but interest is payable on the balance. Cardholders should verify the rates of interest payable, since this could vary from Bank to Bank and also the method of computation i.e. whether such interest is payable from the 1st of the particular month or from the date of transaction or otherwise, so that the card holder can understand the extent of his/her liability. If the total amount due to the Bank is paid on or before the due date of payment, no interest whatsoever is payable. For this purpose you should either settle in cash or by cheque giving a reasonable number of days for realization. A Cardholder maintaining a savings or current account with the Card Issuing Bank could if necessary give standing instruction to the Bank to automatically recover the dues from the account on the stipulated date of payment. A credit cardholder should also inquire from a bank of any penal rates of interest that may be payable for late payment. Since the interest rates charged by card issuing banks are generally higher than rates charged on other types of loans, etc, it is in the interest of the card holder to pay the maximum possible amount on or before the payment due date.

Other Charges

Cardholder should inquire from the issuing bank of any other charges levied, such as annual membership fee, charges for cash advances, or any other charges/fees that are levied by the Bank.

Use of Credit Cards Overseas

A credit card which is issued for international use may be used strictly for personal expenses whilst overseas. Large individual transactions or total transactions exceeding certain limits may be reported to the Exchange Control Department depending on the prevalent regulations. Transactions will be converted to Sri Lanka Rupees, at prevailing exchange rates, and may include a mark up, based on charges levied by Payment Associations.

Banks do monitor transactions deemed to be suspicious, especially transactions originating from foreign countries in order to prevent fraudulent usage. It is therefore highly recommended that you keep your bank informed in advance of your overseas travel which would assist the bank to protect your card from fraud.

Supplementary Cards

Supplementary Cards are issued at the request of the principal cardholder. In such cases the principal cardholder is ultimately liable for all dues arising from the use of the supplementary cards, including any applicable card fees. However, the supplementary cardholder is also jointly and severally liable for the total outstanding balance irrespective of usage.

Changes in contact details

Cardholders should inform the Bank, of any changes to contact details, such as mailing address, telephone numbers, workplace etc.

Default of Payment

Default arises when the cardholder fails to pay at least the minimum payment by the due date. Any cardholder who has defaulted on the payment may be reported after the prescribed period, to the Credit Information Bureau which maintains a database of those who have obtained credit facilities from Financial Institutions by way of loans, overdraft or any other facility and have defaulted payment. Such reporting will result in the defaulter being precluded from obtaining credit facilities from any institution.


If a cardholder has any dispute regarding the items in the card statement he/she should immediately inform the relevant card centre. However, if the complaint is found to be unfounded, there may be additional charges payable by the cardholder. Delays in informing may not enable the Bank to take appropriate action, as stipulated deadlines for dispute resolution, have been laid down by Payment Associations.


  • Due to the increasing instances of credit card frauds, cardholders must attempt to keep the credit card within sight when it is being used for a transaction. This would prevent the card information being copied fraudulently for subsequent misuse.
  • The new/renewed credit card must be signed no sooner it is received. Ensure the existing card is destroyed no sooner you receive the new card, in order to avoid misuse.
  • Do not respond to any suspicious email/phone calls purporting to be from the bank requesting for card number, PINS, expiry dates and security codes. If such request is made, the cardholder should immediately call back a known number of the Bank to verify the genuineness of the request.

All Card Centres of Banks have help desks, manned 24 hours, everyday to assist cardholders with any issue they may face.


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