Credit card payment rule: How many times can you change billing cycle, due date? Here's what RBI says

In a relief to credit card users, the Reserve Bank of India has given them the right to choose or  modify their credit card billing cycles. The central bank released amendment to the master direction-- credit card and debit card — Issuance and Conduct directions 2022, which come into force from March 7, 2024.

As per the latest notification, the RBI asked credit card issuers to provide customers an option to modify their credit card billing cycle at 'least once'. In an amendment to the ‘Master Direction — Credit Card and Debit Card — Issuance and Conduct Directions, 2022’ released on March 7, 2024, the central bank said, "In order to provide flexibility in this regard, cardholders shall be provided the option to modify the billing cycle of the credit card at least once, as per the cardholders’ convenience."

Earlier, the central bank directive said: "In order to provide flexibility in this regard, cardholders shall be provided a one-time option to modify the billing cycle of the credit card as per their convenience." 

Therefore, the central bank asked the card issuers to prove a "one-time option" for cycle change. In contrast, the current provision reads that the option to change the credit card billing cycle "at least once". The major credit card players in the Indian market are American Express, Diners Club, MasterCard, RuPay, and Visa. 

The RBI has issued a fresh set of FAQs in this regard:

1. Can a cardholder modify the billing cycle of a credit card to any date?
The cardholder will be provided option to choose any date as the starting or closing date of the billing cycle at least once. 

Besides, card-issuers may provide the option to modify the billing cycle through multiple channels such as helpline, dedicated email-id, interactive voice response (IVR), internet banking, mobile application and any other modes.

2. What can a customer do if a credit card is issued without his consent?

Card issuers are prevented from issuing unsolicited credit cards and are required to seek prior approval from the customer before issuing a card. 

However, if the customer receives an unsolicited card, they should refrain from activating or providing consent for activation of card through OTP or any other means.

In case no consent is received for activating the card, the card-issuer is required to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation.

3. Can a card issuer levy interest on the unpaid taxes/ levies/charges?

No, card-issuers will not levy interest or any other charges, on the unpaid taxes or charges. As the provision became effective from Oct 1, 2022, card issuers will not capitalise unpaid charges that have been billed from Oct 1, 2022.

4. Can a card be issued to other loan accounts such as overdraft facility, cash credit facility, working capital loan, etc?
Yes, it has now been enabled to issue various types of credit cards which can be customised to access the limits available in different loan accounts. For instance, a customer availing an overdraft facility from a bank can be issued a type of credit card to access the funds made available under the facility.

5. In case a cardholder makes partial payment, can a card-issuer charge interest/levy late payment charges on the total amount due? 

In case a cardholder does not clear the total amount due within the payment due date, interest free credit period will be lost, and interest may be levied from the date of transaction on the outstanding amount (adjusted for payments/refunds/reversed transactions as and when credited) and not on the total amount due.

How to change your billing cycle

To change your credit card billing cycle or due date, check your bank's online platform or contact customer care for guidance. Each bank has unique procedures, so card users will have to clarify their rules. 

Choice of card network

The Central Bank has also asked banks and non-banks to let their customers decide the authorised card network for the credit cards issued to them. This means that credit card issuers, especially those with a large customer base, will have to enter into tie-ups with multiple card networks.

At present, the network choice is done by the card issuer (bank/non-bank) and is linked to the arrangements that the card issuers have with card networks in terms of their bilateral agreements. 

“Card issuers shall provide an option to their eligible customers to choose from multiple card networks at the time of issue. For existing cardholders, this option may be provided at the time of the next renewal,” per the RBI’s circular on “Arrangements with Card Networks for Issue of Credit Cards.”