Gratification @ a swipe

It's the city's showpiece sector— a hub of bright youngsters that defy floods, chakka bandhs and everything in between to keep the industry's wheels moving. Sector V is young, with a majority of its employees falling within the age bracket of 24- 35. Now, a number of IT executives put in 10-12 hours daily, 5 days a week, sometimes 6, so it's pretty much a no-holds-barred mantra for the little time they get for themselves. And having to count one's pennies during that time can be a real dampener.

Enter: Credit cards.  

"Spending is a vengeance mechanism" says Yudhajit Mitra, a 26-year-old IT consultant who recently quit his IBM job to join another company. The starting salary of a fresher in his area of work is approximately Rs. 20K per month. Three years of experience raises the bar to 40-45K. "But he spends 70-75 grand" says Yudhajit "because of credit". A fresher gets a gold credit and a gold debit card as soon as he joins office. Within two years, these are upgraded to platinum cards.

"After being money-starved for 4 years, you tend to splurge," says Mitra.

Sudeshna Chakrabarty, who works in another Sector V biggie, agrees. "Most youngsters start with 1.2 lakhs per annum and end up spending the entire 10,000 a month," she says. The lack of family obligations, according to her, gives them a high purchasing power. "The IT world is glamorous," she tells you; it's difficult to escape its trapping once you're in. Take for instance dressing styles—there seems to be a distinct 'before' and 'after'. After a couple of months many freshers dump New Market and Gariahat for city malls. Sudeshna attributes the change to peer, or rather, colleague-pressure. It's a simple psychological phenomenon — aspiring to a particular standard to fit in.

Savings? They're wafer-thin, if at all, for quite a few. Sudeshna cites the example of a colleague who earns approximately half a lakh each month, but saves nothing. The money finds its way into the cash registers of high-end pubs, restaurants and chic clothing brands.

Dr Debashis Ray, consultant psychiatrist at Harlem Point, terms it “bilateral financial independence”. A young professional not only earns but also spends his money independently. In other words, he is in the process of exploring his financial environment. And any explorer setting out, flaming torch in hand, is bound to encounter his share of bumps along the way.

But then, of course, there are people who wouldn't touch a credit card with a barge pole.  24-year-old IT executive Reema Mukherjee says she works with two kinds—people who own credit cards and use them judiciously, as well as those for whom the cards are "a big no-no". She isn't ignorant of a third kind though. By her own admission, Reema "learnt the hard way"— spending more than her salary in the very first month. Stung once, she now lives by the thumb rule of proportionate spending.

Yudhajit sees two broad categories of people in his workplace. Category X has the "low profile guy" who buys a duplex after five years in office, but still drives a Maruti 800. On the other hand, the people in Category Y change three cars in five years but constantly cry about being in debt. "Corporate loans are easy for IT professionals," states Mitra.

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Fetishes keep changing in this microcosmic world. Gadgets top the list, but then you bump into the occasional weathercock customer. Yudhajit will tell you about a colleague who was hooked onto laptops till December, after which he shifted to imported wines. He has now taken an apartment on rent where he's set up an enviable wine rack. The colleague, however, is a teetotaller.

Deepanjan Deb, who worked as a Marketing Analyst with TCS before pursuing an MBA, recalls a colleague who went on a shopping spree with his first salary. "He's been on a negative balance since," smiles the 25-year-old. With banks wooing IT professionals with a vengeance, credit and pre-approved loans come easy. "Even if you don't have money, you always have plastic," says Yudhajit.

It's pretty simple, he says— the promotion for a new laptop worth Rs. 1 lakh could trigger an hour-long drool, after which a bunch of IT professionals makes a beeline for the bank where they get pre-approved loans.

Maneka Oberoi, a 25-year-old MBA aspirant, spent 4 months in the Wipro BPO after her exams. She recalls being precariously close to hitting rock bottom at the end of each month. Even clearer is the picture of a colleague who would spend his salary on perfumes, watches and branded clothes each month and borrow money from his father for a haircut at the end of it.

"People splurge," says Oberoi. On the other hand, she recalls a number of her ex-colleagues pursuing an MBA or MCA alongside their jobs and taking their money very seriously.

Banks that issue credit cards smile on Sector V. But surely a decent pay package, lack of family obligations and the desire for instant gratification aren't unique to the industry's young executives? Don't they apply to people of the same age group in other industries as well? Yes, but the sector forms "a hub" for prospective loan customers says 38-year-old web designer Anirban Bhattacharya.

"Let's be frank— agents have a target to meet," says an HDFC Bank executive. So, hordes of them woo young IT professionals, who, according to them, have certain lifestyle aspirations. A person's credit worthiness is decided by his or her company profile. According to the executive, who did not wish to be named, employees of IBM, TCS, CTS and Infosys, among others, enjoy high credit ratings, while call centre employees aren't looked upon favourably by banks. After having "burnt their fingers" with defaulters during the slowdown, banks and financial institutions have their 'caution' antennae up and bristling. But does that help in reducing the number of defaulters?

"Lots of them default, though not intentionally," reveals the executive.

The no-cash-pay-it-later liquidity allowed by credit cards is their USP. "The ground rule for their use is to never exceed the sum you can pay off at one shot," says Mrinal Bhattacharya, an ex-employee of ICICI Bank. A number of people stick to the rule, but even more break it. Their modus operandi is to pay the minimum amount each month, thus keeping the card operational. "They call themselves smart users," smiles Mrinal. "Banks sustain themselves a lot on credit card interests," he states, bringing out his own credit document to underline the point— approximately 38% interest per annum is chargeable on an outstanding amount.

The thought of paying 38% interest may cause some to feel shooting pain radiate down their arm. Others will declare they don't think of tomorrow. Carpe diem! And with banks shining on young executives, it's easy to seize the day.


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