Credit card holders can now set billing cycle and payment due date
Have you ever struggled to pay a credit card bill if the due date is around the last day of the month? This, typically, happens when one is short of funds in the final days of the month, as the next month’s salary is awaited. Currently, the due date is fixed at the time of issuance of the card and to date there has been no flexibility or option for the cardholder to fix the due date. Now, cardholders will have the option to set their payment due date.
For the benefit of cardholders, RBI has asked card issuers to allow cardholders an option to choose any date as the starting or closing day of the billing cycle at least once. Credit card bills typically have a 10-15 day repayment period or the payment due date from the billing cycle date. So, if one sets the bill generating date as 1st or 2nd of the month, the due date will be between 10 and 15th of the month.
The good news is this option to set one’s billing cycle and thereby the due date will be available to both new and existing cardholders.
”Both the new and existing cardholders can change the date of the billing cycle more than once. The card holders can now set the billing cycle in a way that suits their cash flow and multiple card holders can also align their due dates to manage their finances better. This would help the card holders manage their finances,” says Moin Ladha, Partner at Khaitan & Co.
Cardholders should set their billing cycle in such a way that their bank account has sufficient cash to not only meet card outstanding amount but also to meet other household expenses during the month. In doing so, cardholders can save on penalty and interest charges on the card spends.
The RBI has introduced another rule allowing cardholders to choose their preferred
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