Credit card users in India may no longer be able to overpay their dues

[paresh22]

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Credit card users in India may no longer be able to overpay their dues

Credit card users in India may no longer be able to overpay their dues: The banks have put guards in their applications to prevent customers from overpaying their credit card dues Indian banks are no longer allowing credit card users to pay more than their outstanding amount. And in the cases...

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[Rohith_Kumar_Sp]

I pay small amounts even before bill generation, how can they calculate overdue? Anything I buy, I pay immediately, we can still do that right?

 

[Pankhuri]

I pay small amounts even before bill generation, how can they calculate overdue? Anything I buy, I pay immediately, we can still do that right?

Nope. Many people have reported that HDFC has refunded their advance payments. Maybe depends on the amount. I myself haven't faced this though, have overpaid about 30% my limit.

 

[SSV]

What happens when someone prepays well before the statement date... They are saying if overpaying the outstaning amount... What if outstanding itself -Ve..

I pay small amounts even before bill generation, how can they calculate overdue? Anything I buy, I pay immediately, we can still do that right?

I do exactly the same and nothing stops us from doing that..
What can they do?... they will refund our money, which we will gladly accept.. thats it

 

[Quantum]

All my accounts have -ve balances all the time( with a very few exceptions) albeit by a small margin <2,000

Hey, does having -ve balance (overpaid bill) on credit cards affect the credit/CIBIL score negatively?
As you mentioned that you have been doing it and you also monitor your CIBIL score regularly, I think you are best positioned to answer this.

 

[NShah]

Hey, does having -ve balance (overpaid bill) on credit cards affect the credit/CIBIL score negatively?
As you mentioned that you have been doing it and you also monitor your CIBIL score regularly, I think you are best positioned to answer this.

-ve balance (overpaid) affect positively to credit report
zero credit Utilisation

 

[aayusharyan]

Credit card users in India may no longer be able to overpay their dues:​

The banks have put guards in their applications to prevent customers from overpaying their credit card dues​

Indian banks are no longer allowing credit card users to pay more than their outstanding amount. And in the cases where the overpayment has been done, they are refunding the excess amount.

The main reason for this is that the banks are concerned about money laundering and fraud. A bank executive quoted in the TOI report said that there have been cases where the excess amount parked in the customer's credit cards has been used for international transactions using hacking.

The banks have put guards in their applications to prevent customers from overpaying. It is allowed to send money through other banks, but in those cases, the card-issuing banks return the surplus funds within a week.

The report said that HDFC Bank, SBI Card and Axis Bank do not allow their customers to pay above the outstanding amount on their apps. However, some customers of ICICI Bank were quoted as saying they are allowed to overpay.

A spokesperson of HDFC Bank was also quoted as saying that customers cannot park their excess funds in credit cards because it is a lending product, not a savings account.

"There is also a recent guideline that asks banks to refund excess credit balances on cards within a certain period. A credit card is not a prepaid card product to permit loading and utilisation of the instrument," they said.

Customers usually overpay their credit card dues in anticipation of a higher-value purchase or overseas travel in the near future. They might be left with fewer options now.

Ohhh shucks. I use on my non daily driver cards to not have any trouble with the payments... Now I need to figure out a different approach.
BTW, I use CRED To overpay and there is no restrictions as since I haven't enabled Cred Protect, they don't know the bill amt.

Example, my IndusInd CC:

 

[aayusharyan]

Hey, does having -ve balance (overpaid bill) on credit cards affect the credit/CIBIL score negatively?
As you mentioned that you have been doing it and you also monitor your CIBIL score regularly, I think you are best positioned to answer this.

It doesn't affect negatively. I have been doing that for years now. Works as usual. Some banks report actual negative, some just report 0 due.

 

[aayusharyan]

Credit card users in India may no longer be able to overpay their dues:​

The banks have put guards in their applications to prevent customers from overpaying their credit card dues​

Indian banks are no longer allowing credit card users to pay more than their outstanding amount. And in the cases where the overpayment has been done, they are refunding the excess amount.

The main reason for this is that the banks are concerned about money laundering and fraud. A bank executive quoted in the TOI report said that there have been cases where the excess amount parked in the customer's credit cards has been used for international transactions using hacking.

The banks have put guards in their applications to prevent customers from overpaying. It is allowed to send money through other banks, but in those cases, the card-issuing banks return the surplus funds within a week.

The report said that HDFC Bank, SBI Card and Axis Bank do not allow their customers to pay above the outstanding amount on their apps. However, some customers of ICICI Bank were quoted as saying they are allowed to overpay.

A spokesperson of HDFC Bank was also quoted as saying that customers cannot park their excess funds in credit cards because it is a lending product, not a savings account.

"There is also a recent guideline that asks banks to refund excess credit balances on cards within a certain period. A credit card is not a prepaid card product to permit loading and utilisation of the instrument," they said.

Customers usually overpay their credit card dues in anticipation of a higher-value purchase or overseas travel in the near future. They might be left with fewer options now.

Ohhh funny story.
Ratnakar bank has been asking me to give my account details for refund and I have been ignoring that like my hoe. 🤣

 

[SSV]

Hey, does having -ve balance (overpaid bill) on credit cards affect the credit/CIBIL score negatively?

NO ..
in fact, it has the opposite effect.. It increases your score by around 10 points..

In other words, having an outstanding balance of ₹1 or above will reduce your score by around 10 points when compared to having an outstanding balance of zero/ -ve
…

 

[SSV]

Ohhh funny story.
Ratnakar bank has been asking me to give my account details for refund and I have been ignoring that like my hoe. 🤣

If you keep it long enough, they may transfer the excess amount to RBI as “unclaimed money” and then you have to follow a process to claim your “unclaimed money” back into bank account…
That is what the above notice says in the last paragraph..

I think recent RBI guidelines may be reason for this…

To prevent this once in a two/ three months it is better to make the balance 0 to keep the score high
or if you don’t mind about a reduced score by 10 points temporarily, you can have some small outstanding balance

 

[Quantum]

NO ..
in fact, it has the opposite effect.. It increases your score by around 10 points..

In other words, having an outstanding balance of ₹1 or above will reduce your score by around 10 points when compared to having an outstanding balance of zero/ -ve
…

Thanks @S S V @aayusharyan @NShah for confirming from you personal experience.

I initially thought to overpay my bills by a few bucks, and I did it just in the last couple of months.
But then I thought let's not be over-smart, and check with other folks first about the effect of this on credit score before continuing the practice.
Thanks for confirming though, appreciate it!

 

[aayusharyan]

If you keep it long enough, they may transfer the excess amount to RBI as “unclaimed money” and then you have to follow a process to claim your “unclaimed money” back into bank account…
That is what the above notice says in the last paragraph..

I think recent RBI guidelines may be reason for this…

To prevent this once in a two/ three months it is better to make the balance 0 to keep the score high
or if you don’t mind about a reduced score by 10 points temporarily, you can have some small outstanding balance

Yeah yeah, I am aware about that.
Once in a quarter, I would swipe my card somewhere and then wait for the actual CC bill to reflect that. (Also because many banks require 1 txn in the last quarter or sth as an internal criteria for LE).
Then again back to this excess balance.

 

[aayusharyan]

NO ..
in fact, it has the opposite effect.. It increases your score by around 10 points..

In other words, having an outstanding balance of ₹1 or above will reduce your score by around 10 points when compared to having an outstanding balance of zero/ -ve
…

@S S V Basic question. But how would this affect if say, I hold 15 credit card and 2 of them have outstanding amount, rest all are negative.
I am asking this because I never really noticed any jump like that in my Credit Scores.

 

[Quantum]

@S S V Basic question. But how would this affect if say, I hold 15 credit card and 2 of them have outstanding amount, rest all are negative.
I am asking this because I never really noticed any jump like that in my Credit Scores.

AFAIK, even 1 rupee as an outstanding amount can bring your CIBIL score down by 10 points.
@S S V can confirm this.
Overpaying may not increase your CIBIL score, probably it would not. As most of them would report it as 0 outstanding balance instead of -ve.

The secret lies in not having a single penny as outstanding amount, I think.

 

[Deleted member 9785]

CC firms need people who underpay to make 40% ROI

 

[aayusharyan]

CC firms need people who underpay to make 40% ROI

Unfortunately for banks, I am not that one. Hehehehe. 😎

Also, Many banks report 0 even though it is in negative.
Reference: My Experian:

 

[SSV]

@S S V Basic question. But how would this affect if say, I hold 15 credit card and 2 of them have outstanding amount, rest all are negative.
I am asking this because I never really noticed any jump like that in my Credit Scores.

Even if you have one account with ₹1 outstanding balance your score will reduce by 10 points even though, your overall balance is in negative

 

[aayusharyan]

Even if you have one account with ₹1 outstanding balance your score will reduce by 10 points

Then I can never get those 10 points as I have loans going on and they report correctly.

 

[SSV]

Then I can never get those 10 points as I have loans going on and they report correctly.

Yes.. to counter this effect if you have home loan,in the mix ,it will neutralise the effect
Avoid BNPL to maximise the score