Hyderabad: The RBI is constantly imposing new rules on credit cards to bring transparency in the use of cards and take steps to protect the rights of cardholders. Some of the latest changes came into effect on June 1. The RBI has made it clear in the new rules certain liabilities to cardholders, as well as banks and NBFCs that issue credit cards. The RBI directive further stated that banks that issue credit cards are held accountable for errors in card management.
To increase the limit ...
Banks say they will increase the credit card limit based on credit score, income, timely payments and so on. This may include changing the card type and increasing the amount allowed to spend. Until now banks have been making this decision on their own and providing that information to cardholders. Sometimes they would send out inflated cards indiscriminately. To issue such cards from now on .. the permission of the cardholders must be taken. It is not possible to increase the limit without the knowledge of the cardholders and impose charges on it. If charged in addition to refunding the amount, they have to pay double the amount of the charges to the cardholders. The cardholder can also contact the RBI Ombudsman in this regard and the same applies to card loans.
Understanding the minimum payment ...
Most people do not pay their credit card bills in full and pay the minimum balance. This is usually up to five per cent of the card balance. Just paying the minimum amount carries a high-interest burden. The RBI has suggested that card issuers should make consumers aware of this. Banks need to make it clear on the bill that it will take a few years to pay off the arrears by paying the minimum amount each month. The RBI is of the view that this will help consumers pay their bills faster and avoid an interest burden.
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Transparency...
Under the new rules, the RBI has directed banks to provide key details of a credit card on a single page. It should state the charges, balance transfer, late payment fees and interest rates applicable in different cases. If new charges are levied .. cardholders should be informed about them a month in advance. If they think that the new charges will be a burden to the cardholders .. they will have the right to take possession of that card. If the new card application is rejected, the reasons for receipt must be stated in writing. If the reasons for rejection are known, clients have the opportunity to be careful in those matters. For example, if the credit score is low, the applicant may try to increase it.
When the card is lost ...
An insurance policy can be taken to cover the loss in the event of a credit card falling somewhere and unauthorised transactions being made through it. Card companies can provide these with the consent of the customer. The cardholder has no role to play in card fraudulent transactions. Card issuing companies are not liable. This is taken care of by the insurance companies. The cardholder should bring the matter to the notice of the banks within three days of the card being lost. Only then will there be a right to compensation for the damage done.
In seven days ...
If the cardholder wants to cancel the card, banks have to complete the process within seven days, or a fine of up to Rs 500 will be imposed from the eighth day. The card will be cancelled only when the cardholder pays the full amount. If the card is not used for one year, the banks have the power to cancel it. Banks and NBFCs are required to give 30 days' notice. If the customer still does not respond .. the card will be cancelled. If the card is not activated within 30 days of receipt of the card, the issuer will ask you to activate it through OTP. If the customer still does not respond .. then after seven days it is possible to cancel the card without charging the card.
