Phew! RBI Announces Major Relief for Credit Card Holders

An account should not be classified as 'overdue' immediately upon the expiration of the stipulated due date. A grace period of three days following the due date must be provided. If payment is made within these three days, it will not be treated as a 'past due' amount, nor will it have any adverse impact on the credit score.

Previously, banks used to levy penalties on the entire bill amount. However, under the new regulations, penalties must be imposed solely on the net outstanding balance payable after the due date.

Notwithstanding the three-day grace period allowed before a penalty is levied, the calculation of 'days of delay' commences from the original due date itself.