Using a credit card? From usage beyond limit to overlimit fees - top queries answered based on RBI’s new FAQs

It's important to use credit cards for expenses while ensuring timely repayment of debts to boost credit scores...

Scenario 1 Credit of refund/failed/reversed transaction within the same billing cyclePurchase transaction date October 15, 2023As bill is yet to be generated in the given case, the refund amount received on October 19, 2023, shall be adjusted with other debits, prior to calculation of the Total Amount Due.Refund on October 19, 2023 - For cancellation of purchase dated October 15, 2023Scenario 2 Credit of refund/failed/reversed transaction post generation of bill but before making payment of the duesPurchase transaction date - October 29, 2023The bill is generated on October 30, 2023, however, the payment towards the dues has not been made till the date of refund..

Therefore, the refund amount received on November 04, 2023, shall be adjusted towards the Total Amount Due (TAD) and accordingly the cardholder will be required to pay only the remaining outstanding (Remaining outstanding = TAD Refund amount).Scenario 3 Credit of refund/failed/reversed transaction for which payment has already been madePurchase transaction date - October 30, 2023As the cardholder has already cleared the dues, card-issuers shall seek explicit consent of the cardholder to adjust the refund amount in line with the provision stipulated at Para 10(h) of the MD.Payment towards dues November 06, 2023Case I - If the cardholder gives explicit consent, then refund amount shall be adjusted.Refund on November 07, 2023 - For cancellation of purchase dated October 30, 2023Case II - If the cardholder does not provide the consent or no response is received for adjustment of the refund, then the refund amount will be credited to the bank account of the cardholder in line with para 10(h).Further, if the cardholder makes a request for crediting the refund (transaction for which payment has already been made), the same shall be credited back to the bank account of the cardholder irrespective of the cut off defined under Para10(h)...

Regarding transactions eligible for adjustment towards outstanding dues and credited to the cardholder's bank account, let's consider a typical credit card billing cycle from October 1, 2023, to October 30, 2023..

Purchase transaction date: October 29, 2023Refund or reversal occurs after the bill is generated but before the payment due date (November 19, 2023).The refund amount will be credited to the cardholder's account and will reduce the outstanding dues to be paid before the due date..

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