Credit Card Fees: Is Your Bank Charging You Before Activation? Here's What You Should Do!

Credit Card
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1️. What Happens During Credit Card Activation?

  • Your credit card is NOT automatically activated upon issuance.
  • Activation usually requires your explicit consent via actions like using an OTP or setting a PIN.
  • Other actions like generating a statement, changing your PIN, or modifying transaction controls can also count as activation.
  • According to RBI, customer care interactions don’t count as card usage unless they involve these specific actions.

2️. When Does a Bank Charge a Joining Fee?

  • As per RBI guidelines, banks cannot charge joining fees until your card is activated.
  • Activation happens only after you’ve completed a verified process (usually OTP-based).
  • If you’re charged before activating, dispute the charge with your bank immediately.

3️. What If You Don’t Activate the Card?

  • If your card isn’t activated within 30 days, banks must get your consent to keep it active.
  • No consent? The bank is required to close the account within 7 days of seeking your consent.

4️. Dealing with Unsolicited Credit Cards

  • Unsolicited credit cards can lead to trouble. If you receive one, do NOT activate it.
  • Without your consent, the bank must close the account within 7 days—no charges should apply.
  • You can also escalate the issue to the RBI Ombudsman under the Integrated Ombudsman Scheme if needed.

5️. Will an Unused Credit Card Impact Your Credit Score?

  • Unused cards don’t impact your score. However, mistakes can happen!
  • If an inactive card is wrongly reported to credit bureaus, the bank must withdraw the report within 30 days.
  • Only activated cards should affect your credit report.

6. Deactivation vs. Closure

  • Deactivation: Temporarily blocking the card (usually for theft, loss, etc.), but the account remains open.
  • Closure: Fully terminating the account, ending your relationship with the issuer. No further transactions allowed.

7️. What to Do If You Have Outstanding Dues

  • If you request a closure but have dues, the bank will provide details of the amount owed.
  • Pay the dues, and the closure process will proceed within the standard 7-day period after payment.