Credit Card: Big news for credit card holders. Nowadays, credit cards are widely used. You can find them not just in major cities but also in tier two and three cities. In this digital age, credit cards have become essential for our everyday lives. Meanwhile, the Reserve Bank of India (RBI) has introduced a significant relief regarding credit. Now, you have the chance to avoid penalties even if you miss the due date. Typically, late payments incur extra charges, but that will no longer be the case.
As per the RBI, banks cannot impose late payment fees immediately if customers miss their due dates. They must provide an additional three days for payment. For instance, if your due date is the 5th, you can settle your bill by the 8th without incurring late fees. You won’t face any extra charges for this. According to the new regulation, late fees will only apply to the outstanding balance, not the total bill amount. This will help lower interest costs.
What does this mean for customers?
This adjustment will undoubtedly ease some pressure on cardholders, as small delays will no longer result in immediate fees. However, it doesn’t imply that you can delay payments. Timely bill payments remain crucial, as interest rates and other regulations stay unchanged. While this new rule provides some relief, it’s advisable to consistently pay on time to avoid penalties.
Impact on credit score
Your account will only be deemed past due after the three-day grace period has lapsed. This indicates that failing to pay your bill after three days will affect your credit score. This new RBI regulation will certainly offer considerable relief to credit card users, but it’s still wise to pay your bill punctually. Doing so will help you avoid the stress of late fees and negative effects on your credit score.
