Blocked Your Credit Card? RBI Rules Reveal Why Your Account Still Stays Active

Kokila Chokkanathan
Many credit card users mistakenly assume that blocking a credit card automatically closes the account linked to it. However, the Reserve bank of India (RBI) has clarified that blocking and closing a credit card are two very different actions. Understanding this distinction is crucial to avoid unexpected charges, interest, or account-related issues.

Blocking vs Closing: Key Differences

1. Blocking a Credit Card

· Blocking is a temporary measure to prevent misuse of your card.

· You can block a card if it is lost, stolen, or compromised.

· Once blocked:

o Transactions are stopped immediately.

o Recurring payments may fail if linked to the blocked card.

o The card cannot be used until replaced or unblocked.

2. Closing a Credit Card

· Closing is permanent and involves formally ending your relationship with the card issuer.

· You must settle all outstanding dues before the card can be closed.

· After closure:

o The credit account is deactivated.

o No further interest or fees accrue.

o The card cannot be reactivated.

Important: Blocking a card does not stop the billing cycle or monthly interest. Outstanding dues continue to accumulate until the account is formally closed.

Why the Account Remains Active After Blocking

According to RBI guidelines:

· Blocking a card is meant only to prevent unauthorized transactions.

· The credit limit, billing, and account status remain active until you request a formal closure.

· This ensures the bank can continue settling pending transactions, charge interest, and maintain credit reporting.

So, even if you blocked your card, you may still see:

· Outstanding balances on your statement

· Minimum payment requests

· Credit score impact if dues are not cleared

Steps to Properly Close Your Credit Card

1. Clear All Outstanding Dues
Pay off any balance, pending EMIs, or interest charges.

2. Submit a Closure Request
Contact your bank via phone, email, or branch visit and explicitly request account closure.

3. Get Confirmation
Obtain a written confirmation that your account is closed and the credit limit is deactivated.

4. Destroy the Card
Cut or shred the blocked card to prevent any misuse.

5. Check Your Credit Report
Make sure the closed card is marked as ‘closed’ and no pending balance is reported.

Key Takeaways

· Blocking a credit card is not enough to stop interest or charges.

· Always formally close the account if you no longer want to use it.

· Following RBI guidelines ensures financial safety and protects your credit score.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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