New Credit Card Billing Rules Effective From July 1 2022
Reserve Bank of India (Credit card and Debit card-Issuance and Conduct) Directions have been issued effective from 1st July 2022. Thus using credit cards and debit cards have become more secure than before. Many people have been receiving unsolicited credit cards even when they have not applied for the same. An unsolicited credit card is a card for which the user has not applied. The existing card users also have experienced an upgrade even when they did not ask for it. The new rules aim to reduce such events and make the usage of cards more easy and safe for all the users.
Some of the Rules that are Effective from 1st July 2022 are Explained Below
- If any unsolicited card is issued, then the person whose name is on the card can file a complaint with the RBI Ombudsman who will then decide the compensation to be paid by the issuer of the card to the complainant for loss of their time, mental harassment and the expenses incurred. Thus, the issue of unsolicited cards or any upgrade without permission is strictly prohibited.
- In case the credit card is provided without the permission of the person, or any upgrade is done without the explicit consent of the cardholder, then the card issuer has to reverse the charges that are levied and also the bill that was raised for the same. The card issuer is also liable to pay charges that are double in amount of the bill that was raised by the issuer.
- The card issuers are expected to provide a one-page key fact statement which states the important aspects of the card such as the rate of interest, the charges that the holder is liable to pay and the quantum of these charges etc. In case of rejection of any application, the issuer is expected to give in writing the specific reason for rejection.
- The card issuers who are using the tele-calling services should ensure that the telemarketers are complying with the directions issued by the Telecom and Regulatory Authority of India. The calls can be made to the customer only during the day working hours.
- The card issuer has to highlight and send the most important terms and conditions to the customers at the time of acceptance when providing the welcome kits and also when any of these terms and conditions are modified by the card issuer.
- The card issuers shall seek a one-time password-based consent for activating the credit card for the customer if the credit card is not activated by the customer within 30 days of receipt. If no consent is received, the issuer shall close the account within 7 working days of confirmation from the customer. No charges will be liable in this case. In case the card is renewed or replaced, the closure of the card is subject to payment of dues from the customer.
- The card issuer is not allowed to share any information regarding a new account with the credit information companies before activation of the card. If any information is shared it is expected to be withdrawn immediately. A time period of 30 days is given for the remediation process.
- As per the new rules, the billing cycle of the credit card will begin on the 11th of the previous month and end on the 10th of the current month. Thus the statement will be generated on the 10th of every month.
- The RBI has directed the card issuers to send a timely intimation of the bills to the cardholders and a sufficient time which is at least a fortnight should be given to the cardholders to pay the interest that is charged on the cards. This will ensure that the complaints of late invoicing will be avoided.
- The refunds or any failed transactions will be adjusted in the amount due by the cardholder.
- For all the credit cards that are issued, the credit cardholders will be provided one opportunity to change the billing cycle.
- RBI has stated that the bills should be sent to the cardholder promptly.
- If a transaction is disputed for fraud. Then, there is no billing till the dispute is resolved. The current and the new rules require shadow reversal of the transaction within a time period of 10 days after reporting the fraud.
- The minimum amount due is such that there is no negative amortization. In simple words, the minimum amount due shall be such that the outstanding balance does not go up even if the minimum amount due is paid.
- The card issuers are expected to assess the risk of the applicant on their own. The credit limit offered to the cardholders will depend upon the risk that is calculated by the issuer of the card.
- The credit card issuers are expected to close the credit card within 7 days of application for the same. Any failure to do this will be penalized at Rs. 500 per day till any action is taken for the same.
Also Read : All Credit Card Customer Care Number
FAQS of Credit Card Billing Rules from 1st July 2022
1:Can a credit card be overpaid?
Yes, any amount which is paid over the account balance that is required will be accounted for by the purchase which is done by the cardholder. The account balance will be negative in this case and the issuer will owe money to the cardholder.
2:What is a grace period?
The period between the end of the billing cycle and the due date till which the payment is due is called the grace period. For this period the issuer will not charge any interest to the cardholder.
3:Can a credit card bill be paid early?
Yes, a credit card bill can be paid early.