New credit card rule will soon save you late fees. Here is what RBI has announced

A 3-day cushion for cardholders

As per the updated norms, “card-issuers shall report a credit card account as ‘past due’… only when a credit card account remains ‘past due’ for more than three days.”

In simple terms, if you miss your due date by a couple of days, your account won’t instantly be tagged as overdue.

That is indeed a welcome shift for anyone who’s ever been late by just a day or two.

No more charges on the full bill

That means you won’t be penalised on amounts you may have already paid, making the system a lot fairer.

What stays the same

There’s one important detail to keep in mind. The RBI notes that “the number of ‘days past due’… shall, however, be computed from the payment due date mentioned in the credit card statement.”

What did the RBI say?

The Amendment Directions shall modify the paragraph 23(5) as below: "Card-issuers shall report a credit card account as 'past due' to credit information companies (CICs) or levy penal charges, viz. late payment charges and other related charges, if any, only when a credit card account remains 'past due' for more than three days. The number of 'days past due' and late payment charges shall, however, be computed from the payment due date mentioned in the credit card statement, as specified under the Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 amended from time to time. Late payment charges and other related charges shall be levied, only on the outstanding amount after the due date, and not on the total amount due."

This update comes after the RBI reviewed industry feedback, noting that “feedback received on the draft Directions has been examined and consequent modifications… have been suitably incorporated.”

The detailed amendment also aligns with wider regulatory directions issued under Section 35A of the Banking Regulation Act, 1949.

When it kicks in

The rules won’t apply immediately. As the RBI confirmed, “the above amendments shall come into force from April 01, 2027.”