New guidelines on Credit card payments – All your Questions answered

Why do some credit card users pay more than the bill amount due each month?

Many credit card users choose to pay more than the bill amount to avoid issues with their credit limits, especially when they anticipate making large payments in the following month. This practice has been a common strategy among cardholders for years.

Is it still advisable to pay more than the bill amount?

No, the dynamics have changed. If you overpay your credit card bill, banks will now refund the excess amount back to you.

What prompted this change in credit card payment regulations?

Banks have observed instances of money laundering and fraud related to overpayments. These activities often involve transferring money from accounts to credit cards for foreign transactions. To combat such fraudulent practices, banks have introduced this provision.

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How does this provision work to prevent fraud?

Banks have implemented measures to restrict overpayments. Popular banks like SBI, HDFC, and Axis are already preventing customers from paying more than the bill amount through their mobile apps. Any excess amount paid will be refunded by the bank within a specified time frame.

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Can I still make credit card payments immediately after making a purchase?

Yes, banks suggest that you make payments shortly after a purchase to utilize your credit limit for subsequent transactions. This practice remains unaffected by the new provision.

Are foreign acquisitions impacted by this change?

Yes, the primary aim of this provision is to prevent foreign acquisitions and transactions linked to fraud. By refunding excess payments, banks aim to maintain better control over credit card activity related to foreign purchases.

Disclaimer:

The content provided in this web post is for informational purposes only and should not be construed as financial advice. Readers are encouraged to consult with financial professionals before making any significant financial decisions.