Billing Cycle or Billing Period is the regular length of time between closing dates of two consecutive bills raised by the card-issuer.
Credit card holders are aware that changing the billing cycle is not an easy task. The billing cycle of a credit card is sacrosanct and remains fixed till the time the card is in use and not cancelled. However, going forward, as a credit card user you will be provided with a one time option to change your billing cycle. RBI has now mandated card issuers to provide a facility to change the billing cycle date and the new rule will be effective from 1 July 2022. “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,” says RBI’s Directions to card-issuers.
Many individuals are holding multiple credit cards. 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.
Billing Cycle or Billing Period is the regular length of time between closing dates of two consecutive bills raised by the card-issuer. As of now, there were no rules regarding the change in billing cycle date. Sachin Vasudeva – Associate Director & Head of Credit Cards, Paisabazaar.com says – “Card-issuers do allow modifications in billing cycles either within their internet-banking portal or mobile app whereas, with some issuers, you may have to speak with the customer care team to avail the facility. However, there were no predefined rules on this and approval of modification request, mode of changing, etc. were completely determined by the card-issuer’s internal policies.”
Credit card statement is generated on a specific date based on which the due date to pay the bill amount is arrived at. If you hold multiple cards, this new credit card rule may help you streamline your finances. “RBI’s new rule around billing cycle modification can help cardholders manage their finances better and more conveniently. They can align their credit card due dates with their salary credit date or cash inflows. The rule is especially beneficial for those who have multiple credit cards.,” says Vasudeva.
Interest free period on credit cards can go up to as high as 45-51 days depending on the time when you swipe your card. “By thoughtfully choosing the billing cycles, they can make the most of the interest-free periods on each card,” says Vasudeva.
The rule to change the billing cycle date not only helps to maximise the use of Interest free period on credit cards but also helps to manage your finances. “While choosing a billing cycle, consumers must give priority to aligning their due dates with the date on which their salary is credited every month. This will help them clear the dues easily and on time as they have enough cash-in-hand because card payments can be stressful when they are short on funds,” adds Vasudeva.