RBI in its April disclosure mandated the credit card issuers to allow users to change their credit card billing cycle as per their convenience. This is something which many credit card users felt was need of the hour considering the credit card bill payment due date used to be at a 15 day window from when the credit card bill used to be generated.
The provisions relating to credit cards under the RBI (Credit Card and Debit Card - Issuance and Conduct) Directions, 2022 shall apply to every Scheduled Bank (excluding Payments Banks, State Co-operative Banks and District Central Cooperative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India. These rules have been in effect from July 1, 2022.
A billing cycle is the timeline for which your spends are taken into consideration by the Credit Card companies in order to present you the credit card bill for each month. Credit card billing cycle is normally 30 days after which you get to know how much amount you have to pay before the bill due date.
The beginning of the billing cycle till the payment due date is the interest-free period that the cardholder enjoys for the transactions done during the billing cycle. Payments made after the due date attract interest and penalty charges in addition to the impact on the Credit Score.
If you want all your payment due dates to be, for instance let’s say, before the 5th of every month, you can accordingly change your credit card billing cycle.
Further, this move by RBI also helps when you have multiple credit cards with multiple due dates.
There’s nothing wrong in using more than one credit card provided you are able to manage them properly. Paying the entire dues on time without delaying and incurring late fees and interest is the best way to use credit cards. While managing multiple credit cards, there is always a concern about billing cycles.
In a nutshell, The rule to change the billing cycle date not only helps to maximize the use of the interest free period on credit cards but also helps to manage your finances.