Paying multiple monthly bills, including Credit Card payments, can be difficult when you have many to remember. If you have many credit cards, it’s easy to lose track of which one is overdue for payment. Don’t freak out if you’ve missed the deadline for making a credit card payment. Banks and credit card companies in India are only permitted by the Reserve Bank of India (RBI) to impose late payment penalties after the third day after a payment’s failure to be received.
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The RBI’s Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 states that card issuers may only report a credit card account as past due to credit information companies (CICs) or impose penal charges, namely late payment charges and other related charges, if any, after the account has been past due for more than three days.
If you forget to pay your credit card bill on time, you have until the end of the third day after the due date to pay it without incurring any fees. Additionally, if you pay off your balance within the allotted time frame, it should have no effect on your credit score.
In the event that a credit cardholder’s payments are still outstanding three days beyond the due date, a late payment fee will be imposed. In most cases, the late charge will be included in the next month’s bill. The amount of late fees is determined by the issuing bank or credit card company.
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The late payment fee assessed by financial institutions and credit card companies is typically a flat rate multiplied by the balance owed. The late payment charge would increase in proportion to the total amount of the bill.
Note that the RBI specifies the payment due date on the credit card statement as the starting point for determining the number of days past due and late payment fees.
The regulatory body has also clarified that late fees, overdue interest, and other associated costs would be assessed solely on the portion of the debt that remains unpaid as of the due date.
