In a significant move aimed at providing greater flexibility and convenience to credit card holders, the Reserve Bank of India (RBI) has introduced major changes in the rules governing credit card usage.
These changes are designed to curb the arbitrary practices of banks and financial institutions and empower customers to make informed choices regarding their credit cards.
Option to Choose Card Network:
One of the key changes introduced by the RBI allows credit card users to select the card network of their preference.
As per the circular issued on March 6, customers now have the freedom to request their desired card network—be it Visa, MasterCard, American Express, Diners Club International, or RuPay—from their card issuers.
This initiative ensures that customers have the autonomy to opt for the network that best suits their needs and preferences.
Purpose of RBI’s Initiative:
RBI’s objective behind this initiative is to ensure that banks and credit card issuers offer their customers a range of card network options during card issuance and renewal.
By providing customers with the choice to select their preferred network, RBI aims to enhance transparency, promote competition, and ultimately empower consumers in the credit card market.
This regulatory change is set to come into effect from September 6, 2024.
New Rule for Billing Cycle:
In addition to the option to choose the card network, RBI has also introduced new rules regarding credit card billing cycles.
Under the revised regulations, existing credit card customers now have the flexibility to modify their billing cycle according to their convenience.
This empowers cardholders to align their billing cycle with their financial preferences and obligations, enhancing their control over credit card usage.
Benefits to Cardholders:
Traditionally, credit card companies determined the billing cycle for customers, dictating when expenses would be tallied and billed.
However, with the new rule in place, customers can now change their billing cycle at least once to better suit their needs.
This provides cardholders with greater flexibility in managing their credit card payments and ensures that they can align their billing cycle with their cash flow and financial commitments.
