Credit Card Penalty Fee: The Supreme Court has stayed the decision of the NCDRC and has allowed the recovery of more than 30 percent annual interest from those who pay the credit card bill late.
Credit Card Penalty Fee: Credit cards are usually used to pay bills etc. Even if there is a shortage of money while purchasing something, a person makes the payment through credit card. However, it is important to pay on time, otherwise the bank has to return the amount with high interest. Now even the Supreme Court has given permission to charge higher interest on credit card default.
Supreme Court stays NCDRC’s decision
Actually, banks charge high interest if the credit card bill is not paid on time. When this matter reached the National Consumer Court (NCDRC), the commission limited the interest rate on credit cards to 30 percent.
Now the Supreme Court has stayed this decision of the National Consumer Forum and has allowed banks to charge high interest on credit card default. While banks have heaved a sigh of relief with this order of the Supreme Court, those using credit cards now need to be more careful in paying the bill on time.
Banks had knocked the door of the court
With this decision of the court, now the bank can impose penalty on credit card users on late payment as per its own discretion. The Supreme Court gave its decision after the appeal of many other banks including HSBC, Standard Chartered and Citi Bank.
Banks say that if the interest rate is limited to 30 percent, then it will not help them to deal effectively with the situation of card default. With this decision of the court, the bank can now impose up to 49 percent interest as penalty on late bill payment of credit card.
Avoid high penalty in this way
This decision of the court has increased the problems of credit card users because now every bank will charge for late payment as per its own discretion. In such a situation, if someone’s credit score is already bad, then he will have to pay more penalty. Whereas those who usually pay the bill on time can negotiate with the bank for a better plan.
In such a situation, if you want to avoid paying high penalty fees to the banks, then make the bill payment on time. Stay up-to-date regarding the credit card, such as keep track of whether the bank has made any change in the penalty rate or not and if yes, then how much impact will it have on you. To avoid high interest, maintain a healthy credit profile by paying the outstanding amount on time.
