If you are a credit card holder, here is good news for you – If your credit card payment is delayed, you will now get more time before the bank charges a late payment fee, as the Reserve Bank of India has asked lenders to relax the norms in this regard. Now you have time till the next billing cycle to pay the money, without late payment charges.
But the bank can still report you to the credit bureau. Customers have to make credit card payments by the due date, failing which they have to pay the dues, along with a late payment fee, interest on past transactions (from the date of purchase), interest on any new transactions (till the time one doesn’t make the entire payment), and service tax of 12.36 per cent on the late payment fee and interest. The interest is charged on all cash advances from the date of the transaction till the payment date. Together, all these can amount to a substantial sum.
If you pay the minimum due, you will not have to pay the late payment fee, though interest will be charged.
Assuming your bill is generated on the 14th of every month (for instance, June 14), the due date is 30th (in this case June 30) and the amount outstanding is Rs 15,000, you have to make a late payment fee of Rs 600 (for most banks), along with interest on the dues. Now, however, the late payment fee will not be charged until the next billing date (July 14). So, you will 14 more days to pay, without having to pay the late payment fee.
Based on the date of a purchase, it is possible to avail of an interest-fee credit period of up to 50 days, depending on the credit cycle.