Credit card users in India may no longer be able to overpay their dues
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Sep 15 2023 | 11:46 AM IST
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 Times of India (TOI) reported on Friday.
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.
First Published: Sep 15 2023 | 11:46 AM IST
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Right.
I also saw same message somewhere in yes bank portal/email that excess payment may be rejected.
With axis last week, I paid about 1000 extra. Then within 2 days, I got sms saying extra amount will be refunded to my savings account, if not used within 7 days. I had some expense so it got used before that and didn't get reversed/refunded.
Last I checked, I wasn't able to overpay more than the bill in a single transaction but it accepted if I paid an amount under the bill.
So after a Rs. 1000 bill, if I transfer Rs. 1000 or lower first, then another Rs. 1000 or lower, it accepted that.