Have you ever struggled to pay your credit card bill when it’s due at the end of the month? This happens a lot when money is tight right before you get your next paycheck. Usually, credit card due dates are set when you get the card, and you can’t change them. But here’s some good news: the Reserve Bank of India (RBI) told credit card companies they should let you pick your own due date for payments.
Setting the Payment Due Date
To help credit card users, the RBI now requires card companies to let users choose when their billing cycle starts and ends. Normally, after the billing cycle ends, you have about 10-15 days to pay your credit card bill. For example, if you choose the 1st or 2nd of the month as your billing start date, your bill will be due around the 10th to 15th of that month.
This option is available for both new and existing cardholders. You can change your billing cycle dates more than once, which helps you coordinate your due dates with when you have money coming in, making it easier to manage your finances.
Benefits of Setting the Billing Cycle
It’s a good idea for cardholders to set their billing cycle so that there’s enough money in their bank account to pay off their credit card bill and cover other household expenses for the month. This helps avoid extra charges and interest on their credit card purchases.
Choosing Preferred Card Network
In addition to choosing payment due dates, the RBI has made a new rule allowing cardholders to pick their preferred card network. Before, cardholders couldn’t choose the network for their credit cards. Now, card issuers will let new cardholders select from different networks when they get their cards. Existing cardholders might get this choice when they renew their cards. However, this rule doesn’t apply to card issuers like American Express, who have their own network. They don’t have to offer cards from other networks.
Importance of Paying Credit Card Bills in Full
It’s important for cardholders to realize that using a credit card means borrowing money from the card issuer. If you don’t pay off your full credit card bill by the due date, you’ll be charged interest on the remaining amount. To help cardholders understand the consequences of only making the minimum payment, the RBI has told card issuers to clearly warn customers on their statements. This warning should explain that paying only the minimum amount each month means it will take much longer to pay off the balance, and you’ll end up paying more in interest over time. The credit card’s terms and conditions should also clearly state that if you carry over any balance from the previous month, you lose the interest-free period on new purchases.
Good Idea