New Credit Card Billing Rules

New Rules for credit card billing that will take effect on July 1, 2022,

New Credit Card Billing Rules: On April 21, 2022, the Reserve Bank of India (RBI) issued new criteria for credit and debit card issuance. New rules involving credit card closure, billing, and other issues are among them.

The RBI (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022 apply to all Scheduled Banks (except Payments Banks, State Co-operative Banks, and District Central Cooperative Banks) as well as all NBFCs (Non-Banking Financial Companies) in India. These regulations will go into effect on July 1, 2022.

Here are a few items to consider when it comes to credit card invoicing.

Credit card billing cycle

A billing cycle is the amount of time it takes for a credit card bill to be generated. If your credit card statement is generated on the 10th of every month, your billing cycle will begin on the 11th of the previous month and end on the 10th of the current month.

There will be no delay in the billing statement.

According to the RBI master direction, card issuers must ensure that bills/statements are issued, emailed, and that the consumer has a sufficient number of days, at least one fortnight, to pay before interest is levied.

According to the RBI, “the card issuer may advise issuing bills and account statements via internet/mobile banking with the cardholder’s informed authorization” to reduce frequent complaints about late invoicing. Card issuers must set up a method to ensure that the billing statement reaches the cardholder.”

Cardholders should receive a response within 30 days of filing a complaint.

Card issuers must ensure that no erroneous bills are generated and sent to cardholders. If a cardholder disagrees with a bill, the card issuer must respond to the cardholder within 30 days of the complaint date with an explanation and, if applicable, documented evidence.

There will be no charges until the disagreement is settled.

Cardholders who reject transactions as “fraud” will not be charged until the problem is resolved.

The ability to adjust the billing cycle

Card companies do not use a consistent billing cycle for all credit cards they issue. Cardholders will be given a one-time option to adjust the credit card’s billing cycle to their desire in order to provide flexibility in this area.

The amount of the refund will be applied to the amount owed.

Before the payment due date, any credit amount resulting from refunds, failed, reversed transactions, or similar transactions for which the cardholder has not made payment will be adjusted to the ‘payment due’ and communicated to the cardholder.

To increase the credit limit beyond a defined level, cardholder approval is required.

Card issuers must get the cardholder’s approval before adjusting credit amounts beyond 1% of the credit limit or Rs 5,000, whichever is lower, resulting from refunds, failed, reversed transactions, or similar transactions against the credit limit for which the cardholder has already paid. Permission must be obtained by e-mail or SMS within seven days of the credit transaction.

According to RBI Master Direction, “if no consent/response is received from the cardholder, the card-issuers shall reverse the credit transaction to the cardholder’s bank account.” Regardless of the cut-off, if a cardholder requests that the credit amount outstanding in the card account be reversed into his or her bank account, the card-issuer must do so within three working days of receiving the request.”

When you’re in a financial bind, credit cards might be a lifesaver. It will not only provide you a much-needed break, but it will also give you the tools you need to get back on your feet without relying on others.

It’s natural to be excited, tempted, and intimidated when you get your first credit card. With each expenditure, you might reap a slew of advantages. It also opens the door to a variety of other financial options.

However, be aware that credit cards can be a double-edged sword. It will not only protect you, but it can also injure you if not used correctly.

Here are some guidelines to follow before applying for your first credit card to guarantee that you get the most out of it:

Examine and contrast the costs, interest rates, and advantages.

Each credit card has its own set of fees, interest rates, and privileges. The ideal credit card for you would have the lowest fees, lowest interest rates, and advantages that are tailored to your specific financial circumstances. While there may not be a single Credit Card that offers you the greatest of all three qualities, you can think about and compare the possibilities that best fit your usage and needs.

A credit card entails a slew of obligations.

Credit cards operate in a pretty straightforward manner. On each purchase you make with your card, the issuing business will lend you money. You will be accountable for repaying the borrowed funds within a specified time frame once a set period of time or even an expenditure restriction has passed. If you don’t, you’ll end up paying a lot of money in interest because of the late payment.

To learn how a credit card works.

Keep only one credit card in your wallet:

When you apply for a credit card, you may receive a number of different offers for various credit card kinds. This does not, however, imply that you must sign up for every offer you receive. It’s advisable to go with a single card if you’re a first-time buyer. You can select the best credit card for you based on a variety of features that meet your requirements.

Remember that the more credit cards you have, the more likely you are to accumulate debt.

Choose a low credit limit.

Spending on your credit card can be enticing because it allows you to make a large purchase. High expenses, on the other hand, imply high repayments, which you may not be able to afford. This is when having a credit limit can come in handy. You can determine the projected amount you can spend without exceeding your credit limit based on your credit limit. It also aids in the development of good spending habits.

Before the end of your billing cycle, pay off your entire credit card balance:

You must pay off your credit card debt within the allotted credit card cycle to avoid incurring late fees. In most cases, first-time credit card users are given an interest-free grace period during which they can pay off their balance. The longer you wait to pay off your amount after the grace period has expired, the higher your late fees will be. Paying off your debt within the specified time frame will not only help you build a positive credit history, but it will also help you develop excellent payment habits in the long run.

Use your credit card responsibly and on a frequent basis:

You may have purchased a credit card to use in an emergency. However, if you don’t use your credit card for a particular amount of time, you’ll be charged extra fees. To avoid this, make minor transactions with your credit card every few months. Ensure that the balance is paid in full before any interest is due.

Know how to use the card and how to keep it safe:

Your Credit Card can be used in any store, both offline and online. You can also use it to withdraw cash from ATMs in specific emergencies. However, there will be transaction fees associated with this.

Furthermore, most cards include security safeguards to ensure that your usage and card information are well safeguarded. All credit cards come with the CHIP + PIN security feature as standard. The integrated chip encrypts all of your card’s data, making it impossible for your credit card information to be duplicated or tampered with. The PIN, which is only known by the user, aids in the authentication of any card transaction.

 

Leave a comment

Your email address will not be published.

%d bloggers like this: