Know New Credit Card Billing Rules In India

As you must know, the Reserve Bank of India, or RBI, regulates the issuance and conduct of our credit and debit cards. Recently, RBI introduced new master directions on the use of cards, which would be effective from 1^st July 2022. With the new guidelines, the usage of Credit Cards will become more secure than before.

Random people received unsolicited Credit Cards, and even existing Credit Card users faced non required upgrades. The new rules of Credit Card payment aim to reduce such mishaps apart from making Credit Cards safer and easier to use than earlier. The new guidelines were released on 21^st April 2022 and included rules on Credit Card payment, billing, closure, etc.

Below are the major Credit Card billing rules, explained:

1. Option to modify billing cycle

A Credit Card billing cycle is the period for which a Credit Card bill gets generated. Card issuers do not follow a standard billing cycle for all the Credit Cards issued. As per the new Credit Card rules, you do not need to follow the normal billing cycle for all your Credit Cards, as you get a "one-time" option to change the billing cycle of your Credit Cards Out of the available option with the Credit Card issuer.

2. Unsolicited cards or upgrades without permission will be strictly prohibited

If an unsolicited card is issued or Credit Card gets upgraded without your explicit consent, you can file a complaint with RBI. The RBI will decide the compensation to be paid by the card issuer to you for your loss of time, mental harassment, and other expenses incurred.

3. Prompt sharing of the billing statement

Credit Card companies must ensure that account statements are sent or emailed to you without delay and that you have sufficient time, i.e., at least a fortnight, to clear the bill before any interest gets charged. RBI has said that the card company can propose issuing bills and statements via the internet or mobile banking with your authorization to avoid repeated complaints of late issuance of Credit Card statements.

4. You must get a reply within 30 days after the complaint is made

Card companies must make sure that bills are generated correctly without any errors. If a cardholder objects to a billing, the card issuer should explain and produce documentary evidence within 30 days from the date of complaint.

5. No charges until resolution of a dispute

Transactions you dispute as 'fraud' won't be charged to you until the dispute gets resolved. In case of such an unauthorized transaction, the card issuer should credit the amount to the customer's account within ten days after reporting fraud.

6. The refund amount gets adjusted to the due amount.

Any credit amount originates from failed, reversed, refunded, or other transactions before the due date for which you haven't made the payment. That will get adjusted in the 'payment due,' and you will get updated about it.  

7. Card companies need your approval to adjust your credit limit beyond a set amount

Companies offering Credit Cards must get cardholder consent before adjusting the credit amounts beyond the cut-off of one percent of your credit limit or INR 5,000. Whichever is lower, arising from failed, refund, reversed transactions, or other such transactions against the credit limit for which you have already made the payment—the permission is to be requested via SMS or email within seven days of the credit transaction.

The card companies must reverse the credit transaction to your bank account if they do not receive consent from you. The cut-off for support is seven days. Notwithstanding the cut-off, if you request your card company to reverse the outstanding credit amount in the card to your account, the card company must do that within three working days.

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