- The Bank will Charge the Interest on the Outstanding Amount of the Credit Card Bill Irrespective of 3 Months Moratorium Period.
- The only Benefit of this Facility is that your CIBIL Score will Remain unaffected and no Extra Charge will be Imposed.
In the latest monetary policy meet held on March 24-27 2020, the RBI has decided to give a 3-month moratorium period for all outstanding loans as on March 1, 2020. Remember, this is not an EMI WAIVER. The move is in line with the economic pressures induced by the Coronavirus outbreak. So, this could mean some savings for you on your loan and help you deal with the likely situation of less or no income. Your credit score will not reduce if you don't pay the EMI. But doing so can raise your interest liability as banks would like to cover their losses, which is likely to be the case on deferred EMI payments, by increasing the interest component of the EMI after the moratorium period gets over. So, if you have the money, keep paying to reduce your interest liability. The moratorium, which was ending on May 31, 2020, has been extended till August 31, 2020.
We can see that after the Coronavirus Outbreak and Lockdown many individuals are going through a financial crisis. Therefore in order to remove the financial burden from the individuals, the Reserve Bank of India has decided to give 3 months suspension for the payment of the credit card bills. But there is no interest benefit while you opt for the 3 months moratorium period. The bank will charge the applicable rate of interest on the outstanding amount of your credit card whether you pay it on time or after 3 months. This guideline has several benefits but you’ll not get any interest benefit during the moratorium period.
Benefits of 3 Months Moratorium Period
CIBIL Score will Remain the Same:- If you skip the payment of the credit card bill for 3 months and have chosen the moratorium period then your CIBIL Score will not be affected. As per the RBI’s guidelines, your CIBIL Score will remain the same even after skipping the credit card bill payment for 3 months.
No Extra Charges will be Imposed:- During the moratorium period, no extra charge will be imposed on the cardholder excluding the interest. The extra charge like late payment fees charged will not be added after three months even if you don’t pay the credit card bill. But the bank will add the regular interest into the outstanding bill amount of the credit card.
Ample time to Make the Payment:- This facility is given to overcome the financial burden. So you have ample of time to clear the outstanding bill of your credit card. You can make the payment after 3 months so that during the time of 3 months you can fulfill your other necessities.
Interest Rates on Credit Cards
|Name of the Credit Card||Interest Rate Per Month|
|HSBC Credit Card||Up to 3.3% Per Month|
|HDFC Credit Card||Up to 3.49% Per Month|
|American Express Credit Card||Up to 3.5% Per Month|
|SBI Credit Card||Up to 3.35% Per Month|
|ICICI Credit Card||Up to 3.4% Per Month|
|CitiBank Credit Card||Up to 3.4% Per Month|
|Standard Chartered Credit Card||Up to 3.49% Per Month|
Now, it must be clear that the applicable interestwill be charged on the outstanding during the Moratorium period. This facilitywill only postpone the repayment of the credit card bill but it will not waiveoff the bill. You will have to clear the bills either on time or after threemonths. The only difference between clearing the bill on time and delaying itby 3 months is that you will have to pay an extra amount of interest after 3months because the bank will charge the interest on the pending amountregularly.