RBI New Rule Effect: Suppose, a card issuer charges 2.5% of the overlimit amount with a minimum fee of Rs 500. This charge can be levied once in a billing cycle. You can talk to your bank or card issuer to understand the process, whether overlimit transactions are allowed on your card and if yes, how much will you have to pay for it.
Due to the great features that come with credit cards, its use is increasing continuously. But there is no doubt that most of the people using credit cards are unaware of some of its very important features. If you have a credit card with a limit of Rs 1 lakh, through which you have done a transaction of Rs 80,000. Now suddenly you have an urgent work and now you have to do a transaction of the entire Rs 1 lakh. In such a situation, can you pay the bill of Rs 80,000 and then do a transaction of Rs 1 lakh again? Under the new credit reporting rules of RBI, this becomes a very important question.
You can spend above the limit even without paying the bill
According to experts, at present, the limit of your card is restored shortly after paying the credit card bill, that is, you can use its full limit shortly after paying the bill. Not only this, if you do not pay the full bill of the card within a billing cycle, then also you can transact more than the limit. However, you will have to pay a charge for this.
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Talk to the bank for Overlimit
Suppose, a card issuer charges 2.5% of the overlimit amount with a minimum fee of 500. This charge can be levied once in a billing cycle. You can talk to your bank or card issuing company to understand this process whether overlimit transactions are allowed on your card and if yes, then how much will you have to charge for this. Apart from this, you can also apply to increase your card limit.
Report has to be given to the bank
The bank will now have to report your credit habits to Credit Information Bureau (India) Limited (CIBIL) or Experian, whereas earlier the bank used to give records of old monthly frequency. This means that your credit score can potentially fluctuate during a month, which was not the case earlier.
What will be the impact on the credit score
Suppose, you have used 80 percent of your card limit, due to which your credit score may decrease slightly. But if you want to pay the bill before the billing cycle ends and the bill is generated, then it will not have any significant impact on your score.
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