Big Credit Card Changes in 2025 – RBI’s New Rules

Key RBI guidelines for Credit Card Issuers (2025)

1. Mandated OTP-based Consent for Card Issuance

• What’s changed:
  • The Bank and NBFCs must obtain the explicit customer consent via an OTP based format before issuing any new credit card.
• Impact: 
  • This allows no more unsolicited credit cards to be available in the market, decreasing fraudulence and theft.
  • This also ensures protection from Identity theft or unauthorized account openings.

2. Firm Timeline for Card Activation 

• What’s Changed: 
  • If the card has not been activated after 30 days of the purchase, the issuer must obtain acknowledgement of the consumer. 
  • If the card is cleared, and not activated, then the issuer must cancel the card with no fees. 
• Impact: 
  • This limits passive liabilities, as well as reduces the risk of abuse.
  • Reduces the risk of consumers being caught by hidden fees with cards that are not used.

3. Clear Communication of Fees 

• What’s Changed: 
  • Issuers must even more explicitly communicate on-boarding fees, on-boarding costs (joining fee, annual fee, interest rate, cash advance fee etc.) when on-boarding the consumer.
  • If some conditions change on their card, consumers must be provided 30 days’ notice prior to the conditions changing to allow maximum transparency.
• Impact: 
  • Consumers have more visibility – less “hidden” costs, which ensures trust in the banking process.
  • Consumers are better able to make decisions about pricing or cancelling cards when conditions change, ensuring complete control in their hands.

4. Improved Billing and Repayment Timelines

• What has changed:
  • Billing statements must now provide for at least a 14-day repayment period from the date the bill was issued.
  • You cannot charge interest on any transaction if you are paid in full by the due date.
• Impact:
  • This will provide more reasonable repayment timelines and allow everyone the ease of repayment with less dissatisfaction.
  • No more interest shock due to anomalies of time period (notice due) related to partial interest calculations. 

5. Explicit Consent for EMI Conversion

• What has changed:
  • Issuers/credit card providers must now take explicit consent from cardholders (OTP or written/email) for any conversion of any transaction to EMI.
• Impact: 
  • No more auto-conversions, which led to unexpected interest charges in the past.
  • EMI repayment structures are customer initiated, not bank initiated. 

6. Rigid closing processes

• What has changed:
  • Credit card accounts must close in 7 working days, unless the request is delayed and dues are settled.
  • If delayed, card issuer will incur a ₹500 daily penalty.
• Impact:
  • Stops issuers from each creating stories to delay.
  • Provides easy exit for unhappy customers.

7. Credit Limit Increase Restrictions

• What is different:
  • Disallow credit limit increases without customer signed or electronic approval; still enable card safety and shield against the possibility of identity theft;
  • Notify cardholders of new credit limit; enable acceptance and rejection of credit limit increases.
• Impact:
  • Allows the customer to manage their credit exposure.
  • Lessens risk of over-borrowing and permits customers to manage a healthier portfolio as a whole. 

8. Credit Reporting Requirements

• What’s changed:
  • Issuers are required to report the use of all cards and payment of amounts on time to appropriate credit bureaus. 
  • Errors must be rectified in an orderly manner; all errors must be rectified within 30 days of complainant so that the banks can respond to all complaints accordingly. 
• Impact:
  • Can enhance credit scores and customers portfolios as a whole
  • Allows consumers to dispute errors and rectify misinformation more easily without the adverse effects of the action. 

9. Rewards and Offers Clarity

• What’s changed:
  • Issuers must be clear in providing an expiration on credit card reward points, if applicable.
  • To properly administer loyalty program notifications in a timely manner, should the terms of the loyalty program change, the issuer is required to notify the customer at a minimum 30 days prior to the changes. 
• Impact:
  • Consumers may be able to plan with more diligence for proper redemption.
  • Less uncertainty or loss from active expiration of redemption schemes.
  • Supplementary Guidelines on Fintech-Issued and Co-Branded Cards

10. Issuers is Legally Responsible for Co-Branded Cards

• In co-branded situations (e.g., co-branded cards such as Amazon ICICI, Flipkart Axis), the regulated entity (being a bank/NBFC), is solely responsible for the customer service and customer grievance redressal, directing customer-support and customer benefits simply to the concerned entities.

11. Digital First Credit Cards (Fintech-Issued)

• RBI has laid down direction to the regulated entity, supervise all “digital-first” (identified as per guideline) cards issued via a fintech company, should be compliant with bank level KYC, Data Safety Regulations, and directed marketing regulations as RBI has a direct stake in consumer and data safety.

Consumer Rights Strengthened Under New Guidelines

Area	Old Practice	2025 guidelines
Card Closure	Lengthy and opaque processes.	A 7-day closure or a fined penalty.
EMI conversions	Often automatic or hidden.	Mandated customer confirmation
Biling Clarity	Variable Grace periods offered.	14-day minimum post-bill window
Credit Limit Changes	Often unsolicited	Consent-based
Card Activation	Card issued and left idle in some situations	Auto-closure after 30 days if not used.

Advice for Consumers in the New Regulatory Environment 

• Always check the welcome kit and fee schedule. 
• Be a credit card user, not an abuser—it’s easy to fall into the trap of unsolicited offers.
• Look for changes in reward programs and potential fees. 
• If you are unsure about a new card, use the cooling-off window wisely.
• Keep an eye on your credit report and make sure it is accurate.