The Supreme Court’s decision of 20 December is a big blow to those credit card customers who do not pay their entire bill by the due date. On the other hand, banks will get a big relief from this decision of the Supreme Court. They will be able to charge more late fees from credit card customers.
Credit Card Late fee: There is no good news for credit card customers. Banks will now be able to charge more late fees from credit card customers. On December 20, the Supreme Court has stayed the 2008 decision of the National Consumer Dispute Redressal Commission (NCDRC). Due to this, those credit card customers who do not pay the entire bill till the last payment will now have to pay more late fees. Let us know about this in detail.
What did the Supreme Court say?
The Supreme Court gave an order in this regard on December 20. The bench headed by Supreme Court Justice Bela Trivedi and Satish Chandra Sharma accepted the petition of many big banks including Standard Chartered Bank, Citibank, HSBC. The bench said that the decision of NCDRC in this matter is stayed. NCDRC gave its decision in this matter on July 7, 2008.
What decision did NCDRC give in 2008?
NCDRC in its 2008 decision had banned charging more than 30 percent annual interest from credit card customers who do not pay the full bill by the due date. Then it had said that even after deregulation in India, the benchmark lending rates of many banks are between 10-15.50 percent. In such a situation, the argument that banks can charge 36-49 percent interest rate is not correct.
On what basis did NCDRC give the decision?
NCDRC had also said that charging such high interest from customers comes under unfair trade practices, because looking at the bargaining position of banks and credit card holders, it seems that customers have no other option but to not accept the facility of credit card. It also said that making a person a credit card customer is a part of the marketing efforts of banks.
How much interest is charged on credit cards in other countries?
The commission then compared the interest rates charged on credit cards in countries like the US, the United Kingdom and Australia. It found that the interest rates on credit cards in the US and the United Kingdom range from 9.99 to 17.99 per cent. In Australia, it ranges from 18 to 24 per cent.
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