3 new credit card rules will come into force on October 1: what impact will this have on cardholders?

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In April 2022, the Reserve Bank of India (RBI) released new criteria for issuing credit and debit cards. These new rules include new restrictions regarding cancellation of credit cards, billing, etc. will come into force on October 1, 2022.

Here’s a look at the three new credit card rules that come into effect next month.

Card issuers must request a one-time password (OTP)

Credit card issuers must first obtain consent based on a one-time password (OTP) if a cardholder has not activated their card for more than 30 days from the date of issue . If the consumer denies the card activation request, the card issuer must cancel the credit card account free of charge within seven business days.

There have been numerous situations where credit cards have been activated and charged without the knowledge of credit card holders; requesting consent, this will not happen and the card issuer will not be charged.

Credit limit approval

Card issuers must ensure that the credit limit that has been approved and notified to the cardholder is never exceeded without the express permission of the cardholder.

Previously, individuals only received messages about credit limit increases. After October 1, 2022, the card issuer will not increase the credit limit without the cardholder’s written consent.

Interest charges

“The payment terms for credit card dues, including the minimum amount due, are stipulated to avoid negative amortization. An illustration is appended. Unpaid fees/levies/taxes will not be capitalized for invoicing/interest compounding,” the RBI Master Circular stated.

“Capitalized interest is the addition of unpaid interest charges to a loan balance (the amount you have left to pay),” according to the American Express website.


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