New RBI guidelines regarding changes in credit card billing cycle

It’s critical to pay your credit card bills on time if you have one in order to prevent late fees and adverse effects on your credit score. But occasionally, the deadline conflicts with your cash flow, making it more difficult to make the payment on time. Thus, it’s critical to modify your billing cycle in order to guarantee on-time payments. Customers can now modify their billing cycles “at least once” to better fit their budgetary needs thanks to the revised RBI guidelines.

The Reserve Bank of India (RBI) recently changed its regulations to make it easier for cardholders to manage credit card payments. Now, they can adjust the billing cycles and due dates of their credit cards.

Credit card companies have been directed by the RBI to permit customers to switch their credit card billing cycle “at least once.” The ‘Master Direction – Credit Card and Debit Card Issuance and Conduct Directions, 2022’ was amended on March 7, 2024, with the intention of providing cardholders with flexibility by allowing them to modify their billing cycle as per their convenience.

The clause used to say that cardholders would have a one-time choice to change the billing cycle of their credit card for flexibility. To give cardholders more flexibility, the amended clause now requires card issuers to provide the option to alter the credit card’s billing cycle “at least once.”

A billing cycle, also known as a billing period, is the time interval that separates two credit card statement dates. Your monthly credit card bill is generated on a statement date. You will usually have an interest-free period of 45 to 50 days after the statement date, with your credit card bill due 15 to 20 days later. The deadline for your credit card payment will modify in accordance with any changes you make to your billing date.

By making this adjustment, you can make sure that the date of your payment falls during periods of high cash flow, like right after you get paid. The chance of missing payments and facing penalties is reduced by avoiding deadlines that fall on days when there might be financial difficulties.

It’s crucial to schedule your credit card bill’s due date during a period when you usually have the money on hand to make the payment in order to prevent falling behind. Choosing a deadline that corresponds with when your pay is typically credited is a smart idea as a general guideline. By doing this, you can be sure that you will have enough money when it comes time to pay the bill. Selecting a deadline that falls at the end of the month, when you might run out of money, is not a good idea.

You can choose the best credit card billing cycle by analyzing your monthly income and expenses if you are self-employed or operate a business. Now that you have the freedom to choose your credit billing cycle, pick a date that best suits your preferences and financial situation. This gives you more convenience and enables you to handle your payments more skillfully.

It can be difficult to remember several credit card due dates, even if you have auto-debit or reminder features set up. High interest rates, late payment penalties, and a drop in your credit score can all arise from missing a credit card payment. Banks may also charge you a fee if you neglect to maintain enough money in your account for the auto-debit.

In light of these difficulties, it is advisable to arrange your credit card due dates in accordance with your preferences and financial circumstances. Some people find it easier and less time-consuming to combine several credit card payments into a single due date. Some people, on the other hand, might find it easier to spread out their payments over several dates, particularly if it relieves financial pressure at the start of the month.

The procedure differs depending on your bank to modify your credit card billing cycle or due date. You can change the due date online with many banks using their net banking platforms. As an alternative, you can get information about altering your billing cycle by giving your bank’s customer service line a call. Keep in mind that every bank has different policies regarding billing cycle adjustments, so make sure to review and comprehend them before making any changes.