Credit Card: Under the RBI’s new rules, a penalty will no longer be levied immediately upon missing a due date. Effective immediately, banks are required to provide their customers with an additional grace period of three days.
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Reserve Bank of India: The Reserve Bank of India (RBI) has provided significant relief to credit card users through its new regulations. Under these rules, you will now have the opportunity to avoid penalties even after the due date has passed. Typically, any delay in bill payment would result in additional charges; however, this will no longer be the case.
Mandatory 3-Day Grace Period
According to the RBI, banks can no longer immediately levy late payment charges if users miss their due date. They are now required to provide their customers with an additional grace period of three days. For instance, if your due date falls on the 5th of the month, you will be able to pay your bill up until the 8th without incurring any late fees. You will not be burdened with any extra charges for doing so.
Furthermore, under the new regulations, late fees will be applicable only to the *outstanding amount*—not to the entire bill amount. This will result in lower interest charges.
Impact on Credit Score
Your account will be considered ‘past due’ only after the 3-day grace period has elapsed. This means that failing to pay your bill even after these three days have passed will have an adverse effect on your credit score. Naturally, this new RBI regulation offers significant relief to credit card users; however, it remains advisable to pay your bills on time. Doing so ensures that you need not worry about issues such as late fees or a negative impact on your credit score.
Under the new RBI regulations, if a bank intends to modify its late fee structure or make any changes to its terms and conditions, it is mandated to provide its customers with prior notice at least one month in advance. All in all, while the Reserve Bank has undoubtedly introduced some relaxations regarding late payment rules for bank customers, it remains in your best interest to ensure that your bills are paid on time.
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