11:30 AM IST – Credit card users in India are now more protected from surprise charges. The Reserve Bank of India (RBI) has stopped banks from silently allowing transactions above the approved card limit and later adding over-limit fees without informing the customer. This rule has now become important because the number of active credit cards in India has already crossed 11 crore, and monthly credit card spending continues to rise nationwide.
Many users in the past faced unexpected charges when automatic EMI payments or emergency transactions pushed them beyond their limit. Those extra charges used to feel like a penalty for something they were not even aware of. RBI has now made it clear: no consent = no over-limit spending.
As per an Economic Times report, this change requires banks must ask cardholders first before offering over-limit usage. You are now in control of your spending and the extra facility.
What’s new in this rule?
- Over-limit is not automatic anymore
- Banks must provide an option to switch ON or OFF this feature
- If OFF, any transaction above your limit will be declined instantly
- If ON, extra limit usage may work, but charges can apply because you allowed it
- No bank can add hidden fees without informing you first
This rule gives control back to every cardholder. You decide how your card should behave, not the bank.
Quick Check for You
Just follow these steps on your bank’s mobile app or internet banking:
- Go to Credit Card Services
- Open Card Controls / Limit Settings
- Check Over-Limit Option
- Keep it OFF if you don’t want any fee surprises
- Turn ON only when needed temporarily
Clear Summary for Cardholders
| If You… | What Will Happen | Benefit |
|---|---|---|
| Disable over-limit | Extra spend won’t go through | Zero hidden fees |
| Enable over-limit | Bank may allow extra spend | Useful in emergencies |
| No consent given | No fees can be charged | Full protection |
Why this move is important
- India’s total credit card dues are now above ₹2.8 lakh crore
- Every day, spending through cards is increasing
- Young users and first-time cardholders are growing quickly
- Many users do not track their limit daily
This rule prevents sudden financial stress and promotes better spending discipline.
Under earlier practices, many banks charged over-limit fees ranging from 2% to 3% of the excess amount (with minimum thresholds), plus interest, often much to users’ surprise. The charges go 500 Rs + GST.
In short, with over 11 crore cards in circulation and rising debt levels, RBI’s new rule is a welcome move at the right time. But only if cardholders themselves ensure the over-limit facility is managed responsibly.
Read – Digital Payments Soar, SBI Card Warns Users: Are You Falling for These Online Scam Traps?
