RBI Allows Credit Card Users to Change Billing Cycle to Avoid Late Fees

If you use a credit card, you probably know the importance of paying your bill on time to avoid affecting your credit score and hefty late payment fees. However, many people struggle with due dates that don’t align with their cash flow cycle, increasing the risk of missing payments. Thankfully, you can now choose or change your credit card billing cycle and due date, according to a recent amendment by the Reserve Bank of India (RBI).

In the updated ‘Master Direction — Credit Card and Debit Card — Issuance and Conduct Directions, 2022’ released on March 7, 2024, the RBI mandated credit card issuers to offer customers the flexibility to modify their billing cycle at least once. Previously, cardholders were only provided a one-time option to change their billing cycle, but now they can do so at least once as per their convenience.

A billing cycle, or billing period, refers to the time between two statement dates, with the statement date being when your credit card bill for the month is generated. Typically, the due date for your credit card bill falls 15-20 days after the statement date, giving users an interest-free period of 45 to 50 days. Changing your billing date will also adjust the due date accordingly, allowing for better alignment with your financial situation.

This amendment aims to empower credit card users to manage their payments more effectively and avoid unnecessary late fees. By providing the option to modify billing cycles, the RBI’s initiative seeks to enhance convenience and flexibility for consumers across India.