Credit Card Billing Cycle: All credit card users are familiar with the term called billing cycle and the importance to follow it to save interest charges and late fees. A billing cycle is the period between the last closing statement and the next. After a credit card is issued, the billing cycle usually remains fixed till the card is cancelled. However, as per Reserve Bank of India’s (RBI) latest guidelines, credit card customers are now allowed to change their credit card billing cycles once, starting from this month.Also Read – Kolkata Ranks Amongst Most Affordable Cities In India | Check Out Other Cities In The List
As the card-issuing lenders do not follow a standard billing cycle for all credit cards, RBI has permitted the users to choose their own billing periods. Also Read – RBI Governor Shaktikanta Das Calls Cryptocurrency ‘Clear Danger’; What Do Experts Say? Know Here
How Does Billing Cycle Works?
A billing cycle of credit cards may vary from 28 to 31 days, depending on credit card issuer. Generally, if a users’ credit card statement is generated on the 25th of every month, their billing cycle will start from 26th of the previous month and continue till 26th of the current month. All transactions made during a billing cycle will reflect in users’ monthly credit card statement or bill. Any transaction that is done after the billing cycle, will be reflected in the next credit card statement. Also Read – Why RBI Governor Calls Cryptocurrencies ‘Clear Danger’? Read HERE
What RBI Says About Credit Card Billing Cycle?
Till recently, there were no rules to modify credit card billing cycles. Card issuers used to allow the customers to change their cycles, depending on their internal policies.
However, in a recent update, RBI said, “Card-issuers do not follow a standard billing cycle for all credit cards issued. 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.” The new rule came into effect from July 1, 2022, allowing customers to have an option to change their billing cycle.
How will this New Rule Help Credit Card Users?
Modification of credit card billing cycle will be extremely beneficial for those who use multiple credit cards. “For the customers, it becomes simple as they do not have to separately remember of dates for their repayments of the multiple credit card bills separately. They can bring everything at a certain date. This will allow them to plan there repayments better,” Sujay Das, chief risk officer, Freo, according to a report by News 18.
According to Pranjal Kamra, chief executive officer, Finology Ventures, the new billing cycle also “allows the user to take maximum benefit of the 45-51 days interest-free credit period available.”