Five Credit Card Rules You Don't Know | Don't Let Your Bank Scam You

[raghu.rokda]

Thank you for making us all aware: who is Sir and who is just dada . 🙂
.

Because rokda & experience is the difference between those two legends 😂

 

[deep@vie]

We all know about credit cards, but we often don't bother to learn about the RBI guidelines for credit cards and their issuers. When we encounter problems, we contact the bank and trust them blindly. But banks don’t always tell you the truth. In fact, people lose more money to banks than to scammers because maximum customers don't know the RBI guidelines and don't question their banks.

Today, I'll tell you about a few crucial RBI guidelines regarding credit cards. Save this post and don't let your bank scam you ever again.

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1. 3 Days Grace Period Rule:​

This rule applies not just to credit cards but also to any credit products like personal loans, home loans, and car loans. You get a 3-day grace period after the due date to pay your EMI or credit card bill. If you pay within these 3 days, the bank cannot charge you any late payment penalties or interest.​

Example: Anil has a HDSC Bank credit card bill of Rs. 5,000 due on May 28, 2024. If he pays by May 31, 2024, HDSC Bank cannot charge any extra penalties or interest. However, if he pays after May 31, he will incur additional charges.​

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*Official RBI Guidelines: check 9. (b). (v). point of Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)​

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2. Cashback or Refund Adjustment:​

If you receive any cashback or refund after your bill is generated, your card issuer must adjust that amount with your total due and send you a new adjusted total due amount.​

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Example A: Anil has an ICCI Bank Credit Card. His bill was generated on May 24, 2024, with a total due of Rs. 10,000. On May 26, he received a Rs. 2,000 cashback. ICCI Bank should adjust his total due to Rs. 8,000. Anil needs to pay Rs. 8,000 by due date now.​

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Example B: Rohit has a HDSC Bank Credit Card. His bill was generated on May 18, 2024, with a total due of Rs. 20,000. On May 24, he received a Rs. 18,000 refund. HDSC Bank should adjust his total due to Rs. 2,000. Rohit needs to pay Rs. 2,000 by due date now.​

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*Official RBI Guidelines: Check 10. (g) point of Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)​

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3. Late Payment & Interest on Due Rules:​

If you make a partial payment on your credit card bill before due date, the bank can only charge interest and late fees on the remaining amount, not on the basis of the original bill.​

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Example: Sujit has an Axix Bank credit card with a bill of Rs. 50,000 due on May 28, 2024. He pays Rs. 30,000 on May 25, 2024. Axix Bank can only charge late fees and interest on the remaining Rs. 20,000 after due date plus 3 days grace period, not the full Rs. 50,000.​

Previously, banks charged interest and fees on the total amount due, but RBI has now instructed banks to stop this practice.​

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*Official RBI Guidelines: check 9. (b). (v). and (vi). point of Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)​

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4. 7 Working Days Credit Card Cancellation Rule: If you request your bank to cancel your credit card, they must do so within 7 working days, provided there is no amount due or active standing instruction. If the bank fails to cancel within this period, they must pay you a penalty of Rs. 500 for each calendar day of delay.​

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Example: Anil asked HSSC to cancel his credit card on May 10, 2024, via email, with no amount due or active standing instructions. Considering only working days, HSSC bank should have closed the card by 21st may, 2024. But HSSC canceled the card on May 25, 2024. In this case, Anil is entitled to Rs. 2,000 (Rs. 500 x 4 days delay) as compensation.​

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*Official RBI Guidelines: check 8. (a). point of Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)​

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5. Extra Payment Transfer:​

If you overpay your credit card or receive a refund after paying your bill, you can request the bank to transfer the extra credit balance to your savings account. The card issuer shall do it within three working days from the receipt of such request.​

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Example A: Bhavye has a Kota Bank credit card. His bill was Rs. 50,000 due on May 28, 2024. He paid Rs. 50,000 on May 20, 2024. On May 25, 2024, he received a refund of Rs. 40,000. Since he already paid his bill in full, he can request Kota Bank to transfer the Rs. 40,000 credit balance to his bank account.​

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Example B: Neeraj has a IDFG Bank credit card. His bill was Rs. 30,000 due on May 29, 2024. He paid Rs. 25,000 on May 20, 2024. On May 25, 2024, he received a refund of Rs. 20,000. Since he already paid his bill partially, he can request IDFG Bank to transfer the remaining Rs. 15,000 credit balance to his bank account.​

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*Official RBI Guidelines: check 10. (h). point of Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)​

What to Do If Banks Don’t Follow Guidelines:​

If any bank doesn’t follow the above guidelines, you can file a complaint with the bank via email. If the bank doesn’t resolve your issue within 30 days, you can escalate the complaint to the RBI Banking Ombudsman for further action.

I hope these rules help you save money. Don't blindly trust your bank, as they won't always tell you what's beneficial for you. Be informed about the banking products you use to avoid being a victim of banking scams. Our mission is to educate people about credit cards and other banking products, and we'll continue to spread correct information and processes.

Related Video On TechnoFino YouTube: Click Here To Watch On YouTube

SBIcards doesn't follow rule no.2 & they boast about not following this rule. One has to mail ombudsman to make them oblige.

 

[Aniket]

SBIcards doesn't follow rule no.2 & they boast about not following this rule. One has to mail ombudsman to make them oblige.

@deep@vie Really? Have you further compelled to pay even after refund/cashback? Kindly attach screenshots of your conversation with them, or atleast explain further about your past case.

 

[deep@vie]

@deep@vie Really? Have you further compelled to pay even after refund/cashback? Kindly attach screenshots of your conversation with them, or atleast explain further about your past case.

It's someone known's case, people aren't interested in raising to higher authorities.

 

[Shin-Chan]

Thanks @TechnoFino Sir, got 550 odd rupees reverse by HDFC for a day late payment back in 2022.

 

[Aniket]

Thanks @TechnoFino Sir, got 550 odd rupees reverse by HDFC for a day late payment back in 2022.

@Shin-Chan Had you made payment on 4th day after due date?

Why does it take so long to reverse?

Reversed is made hmbased on you request or ...?

 

[Ak Singh]

If we pay due amount in 3 days Grace period, so will it report as late payment by 3 days in cibil or no late payment will show?

 

[Shin-Chan]

@Shin-Chan Had you made payment on 4th day after due date?

Why does it take so long to reverse?

Reversed is made hmbased on you request or ...?

Next date.

They charged me and told no cibil late payment I was fine with that.

But recently after this information Shared by TechnoFino, I escalated and put forward my case for those charges to be reversed and after 2-3 times of calling and me humbling the person from Escalation team; leaving her speechless for half of questions asked; today got informed that the charges will be reversed.


There is one more case from 2015/16 where hdfc charges me for a day late CC payment but I don't remember exactly how late I was and all will do digging later and will file that as well of within 3 days not sure if I get back anything but no harm in trying. [Seems like I deleted old CC statement mails and will let this go]

 

[TechnoFinoTechnoFino is verified member.]

If we pay due amount in 3 days Grace period, so will it report as late payment by 3 days in cibil or no late payment will show?

will be considered as on time payment.

 

[thereguser]

@TechnoFino Hi, I have a question, i applied for sbi cashback card under false promises but when i found out the misleading fact i tried to immediately closed the card and did not activate or set the pin for that card. Initially i rejected twice but the for the 3rd time under false claims and with hesitant i took the card. Before i can set the pin SBI automatically generate the bill, Then from Jan 22, 2024 i started emailing all the proper channel for closure of the card and when all of this was going they generate 2nd statement, then when i show the fact if an user did not activate the card or set the pin they cannot generate the bill from RBI, things escalated fast and then on Mar 12, 2024 i received no due certificate letter and card closure document. Can i do anything for this problem SBI caused me for 2 months and which also affected my cibil, experion credit score or any kind of compensation for this issue?

 

[Akash.nagori]

recently I was on a chat with a bank executive to change my billing cycle for 2 of my cards and I hold total 3 cards but the executive she changed the billing cycle for my 2 cards but by mistake she changed the billing cycle of the card which I never asked for change in billing cycle so I can lodge a complaint with rbi and get some compensation from the bank ?

 

[Aniket]

recently I was on a chat with a bank executive to change my billing cycle for 2 of my cards and I hold total 3 cards but the executive she changed the billing cycle for my 2 cards but by mistake she changed the billing cycle of the card which I never asked for change in billing cycle so I can lodge a complaint with rbi and get some compensation from the bank ?

Ask to change what you asked for, tell the bank to rectify the mistake. If you request is not taken and acted upon, then lodge complaint based on deficiency in service.

I think, there's a less chance, RBI will award compensation in the 1st place only as you thought.

Rest all depends upon you. It's your call.

 

[Kumar93196]

My sbi card bill is generated on 4th of June at night of 6.5k and I paid the total 6.5k on 4th of June in morning and payment was shown instantly. My entire credit limit is unused (no dues)still bill is generated worth 6.5k so do I need to pay 6.5k again or should I leave or connect to customer care for resolution.?

 

[krish11]

citi, axis and indus all have asked for proof of txn

Even ICICI and IDFC asked for proof of excess payment. They asked for the ban statement through which the payment was done.
ICICI was not refunding the excess amount at all and kept asking for statements. Finally, I reported to RBI and then immediately refunded after adjusting the unbilled transaction amount.
IDFC was also adamant about bank statements.

 

[Deleted member 11974]

idfc allowed refund without any statements to bank for me once
haven't faced it with icic

 

[vine]

SBIcards doesn't follow rule no.2 & they boast about not following this rule. One has to mail ombudsman to make them oblige.

Yes!
SBI Cards do clearly state in email that cashbacks are *not* count as payment towards outstanding bill amount.
(I know it does, everyone knows it, but they don't confirm it in email).
Two months ago, I had an argument two with SBI Cards, (I was not able to pay the full amount, possibly due to CB exceeding the overpay limit set by SBI Cards).

Am now inclined to recreate the same situation, and restart the argument and quote the 10(g) of this RBI circular.

 

[deep@vie]

Yes!
SBI Cards do clearly state in email that cashbacks are *not* count as payment towards outstanding bill amount.
(I know it does, everyone knows it, but they don't confirm it in email).
Two months ago, I had an argument two with SBI Cards, (I was not able to pay the full amount, possibly due to CB exceeding the overpay limit set by SBI Cards).

Am now inclined to recreate the same situation, and restart the argument and quote the 10(g) of this RBI circular.

I guess now their system has started counting it as payment.
Atleast my app says so

 

[vine]

I guess now their system has started counting it as payment.
Atleast my app says so

It does.
But SBI Cards will not say that in email.
They even mention explicitly in all communication emails.

 

[deep@vie]

It does.
But SBI Cards will not say that in email.
They even mention explicitly in all communication emails.

Will confirm if cashback & refunds are considered as payment & no charges are levied.