Paying credit card bills on the last due date will no longer cost you late payment charges — thanks to round-the-clock NEFT

• People can pay credit card bills round the clock through NEFT, and during weekends as well.
• As of now, this option was available only with SBI credit card app, making it difficult for many users to pay credit card bills on the last day.
  
• Hence, people had to pay late fee if they paid bills on Friday and the deadline is Saturday or Sunday.
  
  

Those who use credit cards know that there is nothing like a last-minute payment. Most of the payments made on the second half of the last day, land users with late fees.

A large section of tend to use credit and debit cards of the same bank and choose to physically transfer it via NEFT from savings account to credit card account. Since these transactions ‘cease’ after banking hours, they slip on to the next day and will be counted as ‘late payments’. A few credit card companies charge 20% of the amount owed, as late fees. Added to that, ‘late payments’ affect credit scores as well.

Starting today, RBI’s move to allow NEFT round the clock will ensure that fewer customers fall into this trap.

As National Electronic Fund extension is made available 24X7 from December 16, users can transfer money on all days of the year, including holidays. It is common for credit card payments made on Fridays being recognised only on Mondays, which lead to confusion and conflict. But extension of NEFT can solve some of these problems.

Then and now

Earlier, NEFT transactions were available between 8 am to 7 pm on weekdays and also for 5 hours between 8 am to 1 pm on first and third Saturdays. But RBI is extending this convenience for users who earlier had to wait or schedule payments for the next working day.

But there might be a blindspot as NEFT transactions will take place in hourly batches.

The first batch between of transactions will take place at 12.30 am and the last batch at 11.30pm . Hence, people might not be able to do any NEFT transaction between 11.30 pm and 12.30 am.

RBI is also ensuring the existing discipline for crediting beneficiary's account or returning the transaction (within hours hours of settlement of the respective batch) to originating bank.

“The banks will ensure sending positive confirmation message for all NEFT credits and all provisions of NEFT procedural guidelines will be applicable for 24x7 transactions as well,” RBI had said. i

No charges on NEFT

This 24/7 option is also good news for bank customers as NEFT is free of cost in most cases. The next best option IMPS however is charged at ₹5 plus GST on transactions between ₹10,000 and ₹1 lakh. Over and above that, around ₹15 with GST.

Immediate Payment Service (IMPS) is also a digital payment system and allows immediate crediting of the transferred amount. NEFT however takes 3-4 hours to reflect.

Banks do not charge for transactions within a bank, but if the user wants to transfer to an account in another bank, it is charged.

RBI had advised banks not to levy charges on transactions through NEFT and Real Time Gross Settlement (RTGS) system in order to promote digital transactions in the country. It set a precedent by not charging banks for settlements.

Earlier, RBI used to levy minimum charges on banks for transactions routed through RTGS and NEFT. Banks, in turn, levy charges on their customers.

RTGS is meant for large-value instantaneous fund transfers, while NEFT is used for fund transfers of up to ₹2 lakh.


See also:
NEFT is available 24X7, transfer money anytime now
Online fund transfers via NEFT and RTGS to cost less as charges are removed