Credit card usage is very common these days. Almost everyone uses them. Credit cards are granted by banks and non-financial institutions. But recently the Reserve Bank of India (RBI) has issued an order simplifying the credit card rules. The rules have been modified especially for the benefit of the cardholders. Earlier we only had the option of issuing a credit card and choosing banks. It is not possible to choose which company to get a credit card. Those banks offer cards from the companies they have tied up with. We can decide which company card we want according to the latest rules.
Effective from 7th
The directives issued by the Reserve Bank came into effect from March 7, 2024. All banks and non-banking financial companies (NFBCs) issuing credit cards must comply with those rules.
These are the new rules.
The cardholder is given the option to choose the start or end dates of the credit card billing cycle. The cardholder can avail these services through helpline, e-mail ID, interactive voice response (IVR), internet banking, mobile application etc.
Usually the card is issued with the permission of the account holder. If the card is received without the customer's permission, it should not be activated. For example, things like OTP numbers should not be given. If permission is not received from the account holder to activate the card, the respective bank or institution shall close the card account within seven working days from the date of request for verification at no cost to the account holder.
The card issuer shall not levy interest on taxes and other charges not paid by the cardholder. This provision is effective from October 1, 2022.
One type of credit cards can be issued for loan accounts like overdraft, cash credit, working capital loan etc.
If the cardholder does not clear the amount within the payment due date, the interest-free credit period will expire. Interest may be charged on the outstanding amount from the date of transaction.
The cardholder should activate the credit card within 30 days from the date of issue. Otherwise permission should be obtained from the card holder based on One Time Password (OTP).
