Use of credit card will now be costly, this decision of the Supreme Court will have an impact

Credit Card Penalty Fee: Credit cards are generally used to pay bills etc. Even while purchasing something, if there is shortage of money, then the person makes the payment through credit card. However, it is necessary to make timely payment otherwise the bank will have to return the amount with higher interest. Now even the Supreme Court has given permission to charge more interest on credit card default.

Supreme Court stays NCDRC’s decision

In fact, if the credit card bill is not paid on time, banks charge higher interest. 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 put a stay on 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, credit card users now need to be more careful in paying bills on time.

Banks had knocked the door of the court

With this decision of the court, now banks can impose penalty on credit card users for late payment as per their 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, it will not help them to effectively deal with the situation of card default. With this decision of the court, banks can now charge up to 49 percent interest penalty on late bill payment of credit cards.

Avoid more penalties this way

This decision of the court has increased the problems of credit card users because now every bank will charge its own charge on late payment. In such a situation, if someone’s credit score is already bad, then he will have to pay more penalty. Whereas usually those who pay their bills 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 banks, then make bill payments on time. Stay up-to-date about credit cards, such as whether the bank has made any changes in the penalty rate and if so, how much effect it will have on you. To avoid high interest, maintain a healthy credit profile by paying the dues on time.

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