new Delhi. Everyone is having trouble with cash due to the Coronavirus crisis. To handle this, the RBI has also cut the interest rates with the EMI Bank Moratorium of 3 months so that banks can give loans to their customers at low interest and also provide facility of not giving EMI of three months. With this facility, people get rid of the worry of credit card EMI for three months and their CIBIL will not be affected. Also, due to not being able to repay the loan EMI on time, the name of the customer will not come in the default list. But, even after giving all these facilities, for the past one week many customers have been informed by the bank through message or e-mail that their existing credit card limit has been reduced. Suddenly in such a situation when people have shortage of cash and due to lack of income, for many people, where credit card is the only expense, then it is a matter of concern for customers to cut the limit. has gone. So in such a case, whoever has received the message or email by the bank to reduce the credit card limit, there is no need to get upset or nervous. We will tell you what you should do and why the bank has reduced your credit card limit?
Why is the credit limit being reduced?
According to experts, banks are seeing increased risk in their credit card portfolios, as well as banks believe that due to lack of cash, people will spend on credit cards but will fail to pay on time. If the limit is low then people will spend, keeping in mind their pocket and financial crisis in future. More than half of the banks' NPAs also result from losses from the portfolios of customers who do not pay their credit card bills. Which is why banks' NPAs start increasing and the bank ultimately suffers losses due to loan defaulters.
With this step of the bank, customers will spend less and later the burden of IMAI on the customers will also be reduced.
There are many banks, including ICICI Bank, Axis Bank, HDFC Bank, RBL, SBI, Kotak Mahindra Bank, which have reduced the credit limit of their existing credit card holders.
Sameer Mittal, managing partner of LLP Associates, believes that "the credit limit has been reduced by banks to reduce the increasing trend of withdrawing cash from credit cards because withdrawing cash from credit cards requires the customer to charge more or pay later." Which is much more than any other credit card payment. ”
The bank keeps reducing the credit card limit of its customers from time to time. This is not the first time banks have done this.
Banks continue to take such steps despite the credit score of the customers, CIBIL and their ability to spend.
Also, any customer who has not used even 30% of their credit card limit in the last two years, the bank is reducing their credit limit.
Customers who delay in depositing payment after using their credit card and name has also come in the defaulter. Bank is also reducing the credit limit of such customers
Also, all customers who have taken advantage of RBI's three-month EMAI discount. From this it is evident that the customer is short of cash and they may fail to pay even further. In such a situation, the bank has also reduced the credit limit of those customers.
What do customers need to keep in mind?
According to experts, customers using credit cards should make their payments on time.
According to Sahil Arora, director and group head, investment, Paisabazaar.com, “In the current situation, most banks are taking necessary steps by reviewing the credit limit of credit card holders. I think the credit limit of self-employed customers, the people working in the areas that are most affected by the current crisis and those who have been unable to make their payments continuously, will be affected. ”
From time to time, you should keep using the credit card a little. So that your credit card remains active
Always check your CIBIL and credit score
If more than 50% credit card limit is used and paid on time, then the probability of lowering the limit is much less.
Assure banks to keep their credit score correct by making timely payments
Keep in mind that after 3 months RBI discount, you will have to pay your credit card with interest. So pay on time and use the credit card properly. Otherwise the limit may be reduced further
If you do not pay the credit card bill on time, you may have to pay 40-50 percent interest.
· If you have made all the payments on time and will continue to do so, after some time, the bank itself will increase your credit limit, seeing that the corona crisis is reduced. Or after fixing your financial problem, you can talk to the bank yourself and increase the credit limit.
Keep in mind that if there is any problem in understanding any information, then contact the bank employee or talk to your financial advisor.
This post was published on May 9, 2020 2:28 am
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