Not making credit card payments on time could have serious implications for credit card holders. Their CIBIL score may go down and moreover, they end up paying a late fee along with interest on the due amount.
However, there are times when a credit card customer intends to make the payment on time but fails to do so due to a personal emergency, or some even just forget the due date. Is there any relief for such credit card customers?
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Yes, there is some relief for credit card customers, who have missed the due date. However, they must make the payment within three days of the due date.
According to the “Master Direction” by the Reserve Bank of India (RBI), credit card issuers can report an account as “past due” to credit information agencies or levy any penalty only if the credit card account remains “past due” for over 3 days.
“Card-issuers shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz. late payment charges and other related charges, if any, only when a credit card account remains ‘past due’ for more than three days,” says RBI’s Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022.
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“The number of ‘days past due’ and late payment charges shall, however, be computed from the payment due date mentioned in the credit card statement, as specified under the regulatory instructions on ‘Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’ amended from time to time,” it adds.
According to the RBI’s master direction, penal interest, late payment charges and other related charges can be levied only on the outstanding amount after the due date and not on the total amount.
