Credit card issuers are withdrawing benefits: What are your options?

Credit cards are increasingly reducing benefits and, in some cases, withdrawing cards altogether to prevent misuse. So, what options does a customer who buys a credit card for his own benefit have if he suddenly withdraws his card?

RBI guidelines

As per RBI (Reserve Bank of India) rules, card-issuing banks are required to give adequate notice to customers about such changes. According to the RBI’s main circular, “Terms may be changed by the bank, but the cardholder will be given adequate notice of the change so that he can withdraw (the card) if he so desires.” credit cards.

Although the RBI did not specify the time period, it said the card-issuing bank should clearly state the time frame available to the customer to make the decision. If the customer does not notify his/her decision within the time limit, the card is deemed to have accepted the changes made by the issuing bank.

“A period will be prescribed within which the cardholder will be deemed to have accepted the terms if he/she has not withdrawn (the card) within the specified period,” said the RBI. It was stated that the customer can surrender his card if he wishes, if it turns out to be problematic.

If the bank that issues the card wants to make changes to fees other than interest, one month’s notice must be given. “Changes in charges (other than interest) can be made with prospective effect only by giving at least one month’s notice,” the RBI said.

Recent changes

Many credit cards, which were launched with attractive advantages, have had their ratings dropped in recent months following complaints of abuse. ICICI Bank has recently reduced the benefits offered to customers on credit cards.

The bank limits reward points to spending on groceries, utility payments and insurance purchases. no it will happen reward points About government related charges on ICICI credit cards. The changes will come into force from November 15. ICICI Bank has also stopped spa access and charges for senior cards. ₹75,000 every three months is mandatory for access to lounges at domestic airports.

HDFC Bank had earlier announced that it was limiting reward points for many popular categories on the cards. It fixed reward points for utility spending and telecom and cable transactions across all credit cards at 2,000 per month. HDFC’s cap on reward points came into effect from September 1.

Similarly, the Yes Bank Marquee credit card was also devalued recently. Airport lounge access now requires a higher spending threshold. The use of reward points for flight and hotel reservations is limited to 70% of the invoice amount. Rental payments, government-related expenses, and education payments are excluded from the spending thresholds. annual fee Cancellation and milestone benefits on many leading credit cards.

However, will the customer be charged a fee if he surrenders the card due to a card change? benefits or accusations? Absolutely not. “If the credit card holder wishes to surrender his credit card due to a change in credit card fees to his detriment, he may be allowed to do so without the bank having to charge any extra fee for this closure. “Any request for closure of a credit card must be complied with immediately by the credit card issuer, subject to payment of all dues by the cardholder,” the RBI said.

Allirajan M is a journalist with over two decades of experience. He has worked with many of the country’s leading media organizations and has been writing about mutual funds for nearly 16 years.