The Reserve Bank of India (RBI) has released amendment to the master direction-- credit card and debit card — Issuance and Conduct directions 2022. The latest amendments will come into force from March 7, 2024 onwards.
Among several changes, the new RBI rules stipulate that at least once, the cardholder will be provided option to choose any date as the starting or closing date of the billing cycle.
Instructions relating to credit cards will apply to all credit card issuing banks and non-banking financial companies (NFBCs).
The new provisions have been explained with the help of a set of FAQs released by the RBI.
Here are some of the frequently asked questions :
Can a cardholder modify the billing cycle of a credit card to any date?
The cardholder will be provided option to choose any date as the starting or closing date of the billing cycle at least once.
Additionally, card-issuers may provide the option to modify the billing cycle through multiple channels such as helpline, dedicated email-id, interactive voice response (IVR), internet banking, mobile application and any other modes.
What can a customer do if a credit card is issued without his consent?
Card issuers are prevented from issuing unsolicited credit cards and are required to seek prior approval from the customer before issuing a card.
However, if the customer receives an unsolicited card, they should refrain from activating or providing consent for activation of card through OTP or any other means.
In case no consent is received for activating the card, the card-issuer is required to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation.
Can a card issuer levy interest on the unpaid taxes/ levies/charges?
No, card-issuers will not levy interest or any other charges, on the unpaid taxes or charges. As the provision became effective from Oct 1, 2022, card issuers will not capitalise unpaid charges that have been billed from Oct 1, 2022.
Can a card be issued to other loan accounts such as overdraft facility, cash credit facility, working capital loan, etc?
Yes, it has now been enabled to issue various types of credit cards which can be customised to access the limits available in different loan accounts. For instance, a customer availing an overdraft facility from a bank can be issued a type of credit card to access the funds made available under the facility.
In case a cardholder makes partial payment, can a card-issuer charge interest/levy late payment charges on the total amount due?
In case a cardholder does not clear the total amount due within the payment due date, interest free credit period will be lost, and interest may be levied from the date of transaction on the outstanding amount (adjusted for payments/refunds/reversed transactions as and when credited) and not on the total amount due.
What will be seen as credit card’s activation?
Customer-initiated process indicating intent to use a credit card such as PIN generation, modification of transaction control, Interactive Voice Response, recorded call to the customer care centre and SMS may be considered as activation.
However, if the card is not activated by the cardholder for more than 30 days from the date of issuance, card-issuers will need to procure One Time Password (OTP) based consent from the card holder.
FAQs
Can you change the dates of a billing cycle? While you can't choose the dates or lengths of your billing cycle, you can adjust your payment due date, which causes your billing cycle dates to shift. Many card issuers let you choose from a variety of dates, so you can select the best due date for your cash flow.
How is the credit card billing cycle determined? ›
Every transaction that is carried out in this period will be mentioned in the card statement for the month. For instance, when the billing or statement date of the credit card is the 4th of each month, the billing cycle will typically start from the 5th of the previous month to the 4th of the present month.
How do RBI's latest rules on credit card billing cycle impact you? ›
The latest amendment stipulates that the cardholder will be provided option to choose any date as the starting or closing date of the billing cycle at least once. Additionally, card-issuers may provide the option to modify the billing cycle through multiple channels, RBI's rules state.
How do I change my credit card billing cycle? ›
The process of changing credit card billing cycles or due dates will differ from one bank to another. Most banks provide options to change the credit card due date online on their net banking platforms. You can call the customer care department of your bank and inquire about the process to change your billing cycle.
Can billing cycle be changed? ›
Your card issuer might be able to change your account's billing cycle, but you'll be notified before that happens. While you generally can't choose the length of your card's billing cycle, you may be able to request a new due date for your bills.
Does changing billing cycle affect credit score? ›
Not all credit card issuers allow changes in the billing cycle. Individuals should choose credit cards with billing cycles that suit them. After paying only the minimum due amount, the credit score might not fall. However, the credit score might not increase by paying only the minimum due amount.
What is the cycle billing method? ›
Cycle billing is a style of account management that enables companies to bill customers on different days of the month, rather than all on the same day. The practice allows the company to prepare and distribute statements on different days, versus having a glut of invoices that must be sent at the same time.
What is the standard billing cycle? ›
What is the Billing Cycle? The billing cycle is the period between the last billing date and the current billing date for any sale of goods or provision of services. The length of billing cycles varies depending on the lender or service provider, but usually, it lasts from 20 to 45 days.
What is the difference between billing cycle and due date? ›
The closing date is the last day in a billing cycle, and the due date is when a payment is due on your credit card, usually about one month after the closing date. As an example, if your closing date is June 5, 2025, your credit card statement may arrive on June 8, 2025.
What are 3 transactions that can occur during a billing cycle? ›
The next billing cycle starts, and new transactions can impact your current balance, such as:
- Purchases.
- Balance transfers.
- Cash advances.
- Interest charges.
- Fees.
- Payments.
- Statement credits.
It's based on the closing date of your last billing cycle. The due date is at least 21 days after the closing date (remember, this is when the credit card statement was generated). That 21-day period is referred to as a credit card grace period.
What are new RBI guidelines for cards? ›
a) Card issuers shall not enter into any arrangement or agreement with card networks that restrain them from availing the services of other card networks. b) Card issuers shall provide an option to their eligible customers to choose from multiple card networks at the time of issue.
How do credit card billing cycles work? ›
A credit card billing cycle is a time period between statements when transactions post to your account. There's a start date and closing date in each billing cycle. The transactions completed within that time period appear on the that statement.
Should I pay off my credit card before the billing cycle ends? ›
Paying your credit card early could help your credit score
By making an early payment before your billing cycle ends, you can reduce the balance amount the card issuer reports to the credit bureaus. That means your credit utilization ratio—the total percentage of available credit you're using—will be lower as well.
What is the best credit card due date? ›
To avoid paying interest and late fees, you'll need to pay your bill by the due date. But if you want to improve your credit score, the best time to make a payment is probably before your statement closing date, whenever your debt-to-credit ratio begins to climb too high.
Does changing due date affect credit score? ›
Changing your credit card due date in and of itself will not have any effect on your credit score. But be sure that you pay attention to when the change goes into effect. It might not happen for a billing cycle or two, and if you end up missing your payment as a result, that will have a negative impact on your score.
What is the best way to schedule a credit card payment? ›
The best way to pay credit card bills is online with automatic monthly payments deducted from a checking account. This minimizes the chances of missing a credit card payment due date, and it can also help cardholders avoid interest charges, depending on the type of payment scheduled.
Can I ask my credit card company to lower my monthly payment? ›
Getting a lower minimum payment on your credit cards may be as simple as asking for it. When speaking with a customer service representative, it may help to inform them of the financial difficulties you're facing (if any) and ask what help is available to lower your minimum payments.
