The COVID-19 pandemic has adversely affected the global economy and sparked fears of a recession. The economic fallout has resulted in a loss of income for millions of Indians, making it difficult for them to repay their credit card bills and bank loans.
To help the Indian citizens through these tough times, RBI directed all banks to allow a moratorium on credit card payments and loan EMIs until 31st August 2020. This was done to help people manage their short-term liquidity concerns through the lockdown period. Credit card users either have the option to take advantage of this moratorium or continue to make regular payments.
Now, the question arises whether to opt for this credit card moratorium. Let’s take a look at some of the factors you should know when deliberating over the RBI credit card moratorium:
If you decide to opt for the credit card moratorium, you do not have to pay your credit card bills till 31st August 2020. Apart from this, your credit card will not be blocked during this period due to non-payment of credit card bills.
The banks will not charge a late fee if the moratorium service is enabled. If you have allowed the ‘auto-pay’ option on your credit card, you will have to turn it off to make use of this service.
Your credit score or CIBIL (Credit Information Bureau India Limited) score will not be affected if you do not pay your credit card dues till August end.
It is a three-digit synopsis of your overall credit history and is obtained from the credit history found in the CIR (Credit Information Report). CIR comprises an individual’s credit payment history across credit institutions and loan types over a period. A 50+ score is considered a good one by various lenders.
During this period, the banks will continue to charge the applicable rate of interest on the unpaid dues. The moratorium allows a deferment of credit card bills, wherein you do not have to pay the minimum amount due. In normal cases, you can defer payment by paying the minimum due amount, and the outstanding balance rolls over to the following month. In this process, the unpaid amount is carried over to the next billing cycle, and interest ranging between 2-4% is levied on it.
Usually, in the case of a default in credit card bills, your reward points get blocked. Since non-payment during the moratorium will not be considered as default, you will be free to use your reward points against exciting products and services.
Avail Credit Card Moratorium with Axis Bank
Maintaining financial liquidity is quite important to deal with personal finances in these tough times. If your income is irregular and you are struggling for liquidity in this pandemic scenario, then opting for a credit card moratorium service is a good bet.
Otherwise, you are advised not to opt for the moratorium and continue to pay your credit card bills on time with the regular income coming in. It will help in avoiding accrual of interest charges over time. You can even opt for another credit card from reputed and trustworthy banks such as Axis Bank. They offer several credit cards to meet your requirements, and all of them come with the moratorium service in case you need it. Make sure your financial decisions made during the pandemic times will not have any negative impact on your life ahead.