Credit card users may now get more than one chance to modify their billing cycles, thanks to RBI. But the decision to provide multiple opportunities for billing cycle modification would rest with credit card issuers. However, at least one opportunity to do so is guaranteed! Let’s dive into details for clarity.

Earlier, the Reserve Bank of India (RBI) provided a “one-time option” to credit cardholders to modify their billing cycles, as per ‘Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022.’ However, the RBI recently amended the “Master Direction”, effective from March 7, 2024.

The previous version of the Master Direction 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.”

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In the amended version of the above rule, the RBI says cardholders shall get the option to modify their billing cycle “at least once”.

“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 option to modify the billing cycle of the credit card at least once, as per the cardholders’ convenience,” the amended rules say.

What the above means is that at least one opportunity to modify the billing cycle is guaranteed to all cardholders. Card issuers can, however, choose to provide more than one modification opportunity as the RBI’s Master Direction no longer mandates only a “one-time option”.

The amended rule applies to all credit card issuing Banks and Non-Banking Financial Companies (NBFCs).

Choose any date

Credit cardholders can also chose any date of the month as the starting or closing day of the billing cycle at least once. “The cardholder shall be provided option to choose any date as the starting or closing day of the billing cycle at least once,” RBI says.

The Reserve Bank further says that the option to modify billing cycle should be available through multiple channels, including helpline, dedicated e-mail-id, Interactive Voice Response (IVR), internet banking, mobile-application etc.

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How will the new credit card rule help users?

The freedom to choose credit card billing cycle can significantly impact a cardholder’s monthly cash flow. Cardholders can set their billing cycle in such a way that suits their cash flow.

Further, cardholders can use this facility to maximize the credit-free period allowed by credit card issuers. Generally, there is a gap of around 21-25 days between the end of billing cycle or statement date and credit card due date. This period is interest-free credit period or grace period offered by the card issuer. Some issuers may offer longer interest-free periods.

For example, SBI Card provides interest-free credit period of 20-50 days. With the help latest rule change announced by RBI, cardholders can set the billing cycle in a way that best suits their cash flow.

Multiple credit cardholders can also benefit with the new rule by setting all the due dates on the same day.