Can banks charge a joining fee before your credit card is activated? They cannot, as the credit card account is only created once the card is activated. With reports of banks charging joining fees prior to activation, issuing unsolicited cards, and delaying account closures despite formal requests, here are some important points you should know about credit card activation and related rules.
When is a credit card activated?
A credit card is considered activated once the customer authenticates their intent to use the card by entering an OTP (one-time password) sent to their mobile number. Activation occurs even if no financial transactions are made; for example, setting a PIN without using the card still constitutes activation.
According to the RBI (Reserve Bank of India), any activity initiated by the cardholder, such as generating a statement, changing the PIN, or adjusting transaction controls, will also be considered as using the card.
However, any calls made to the customer care centre, for reasons other than those cited above, shall not be considered towards usage of a card, it said. “Customer-initiated processes indicating intent to use a credit card such as PIN generation, modification of transaction control, Interactive Voice Response, recorded call to the customer care centre and SMS may be considered as activation,” RBI said.
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Is there a timeframe for activating the card?
Yes. If you do not activate your credit card for more than 30 days from the day it was issued, card issuers will seek an OTP-based consent. “If the card is not activated by the cardholder for more than 30 days from the date of issuance, card-issuers shall seek OTP based consent,” RBI said.
“If the cardholder does not provide consent, the card issuer has to close the credit card account within seven days of seeking consent,” it said. Any request to close the credit card should be processed within seven working days if there are no outstanding dues.
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