As the per the SBI website, in case the payment is not made by due dates in Mar 2020, Apr 2020 or May 2020, the cardholder will be enrolled automatically for the moratorium.
SBI Credit Card Moratorium Details: If you are an SBI credit card holder and looking to avail the RBI’s offer of EMI moratorium, there are a few things to keep in mind. As the per the website, if the payment is not made by due dates in Mar 2020, Apr 2020 or May 2020, the cardholder will be enrolled automatically for the moratorium. To avail the SBI credit card moratorium online, the link on the SBI Card website may be used to fill the form. On the SBI Card website, you may click on the Bot called ‘Ask ILA’ for the link and the request for the application form.
Let us see some of the important SBI credit card moratorium details:
1. Period of moratorium
RBI had asked banks to allow 3 months of a moratorium on EMI’s for all term loans including retail loans such as home loan, car loan, education loan or personal loan. Such moratorium also includes credit card dues falling between March 1, 2020, and May 31, 2020.
2. Deferment of dues
The moratorium does not mean one will not have to pay the dues or the EMI to the bank or the lender. It means, your dues and EMI will be deferred for 3 months and later on they have to be repaid. As per RBI guidelines, interest will continue to accrue on your credit card outstanding balance.
3. Auto-debit facility
If you have already availed the auto-debit or ECS facility through which your card dues are automatically paid and now you wish to opt for a moratorium, you will have to modify the mandate. Unless you change the mandate, the amount will be automatically deducted.
4. Eligibility for moratorium
Only those accounts or credit cards (even more than one) which was in current status (non-delinquent with no overdue) as on 29 February 2020 will be eligible for the moratorium. Also, new credit cardholders who have been issued cards on or after 1 March 2020 will not be eligible for the moratorium.
5. Late payment charges
In all credit cards, a minimum of 5 per cent of the outstanding amount has to be paid in order to avoid late payment charge or fee. However, under the moratorium, the late payment charges applicable when the credit card holder does not pay any amount on the due date will not be charged.
6. Credit card statement
Even if one avails the moratorium, the credit card statement will continue to get generated and will be sent. The statement will include past dues and new charges (including usage, interest levied due to the deferral of payment during the moratorium). The interest will be calculated from the date of individual transactions till the statement date.
7. Charges after moratorium ends
Even during the moratorium period, the interest will continue to accrue on the unpaid dues. After the moratorium period ends, this interest amount in addition to the GST on it, will be required to be paid.
8. When to pay after the moratorium ends
You will have to pay the entire accumulated outstanding (including EMIs) together as per your June 2020 payment due date, along with the interest that shall continue to accrue on the outstanding balance of your credit card during the moratorium period.
9. Impact on Credit Score
As per RBI, rescheduling of payments, including interest, due to moratorium will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies (CICs).
10. EMI on credit cards
All EMI payments falling due in the moratorium period will be deferred and will become due for payment as per your June 2020 payment due date. The interest rate of up to 3.35 per cent per month would be applicable during this period, and there will be no extension of tenure for EMI payments
Opting for a moratorium on credit card dues will only provide temporary relief. The interest rate on credit card transactions is in the range of 36 per cent to 42 per cent. On a monthly basis, 3.35 per cent of the outstanding amount is being charged. If the financial situation allows, it is better to pay the entire credit card balance on or before the due date. Any rolling over of credit card outstanding may push one into a debt trap in the long run.
At this time when many are hard-pressed for funds, because of the COVID-19 led economic crisis, such a moratorium could come as a relief measure for them. Although availing the moratorium may help the cardholder to tide over the tight financial situation that they may be in, it may further aggravate their weak financial condition later on.