Debit and Credit Cards: Types, Features and Rules
One spends your money, the other the bank's. That difference is why card dues end up in collections.
A debit card spends the customer's own money from a savings or current account. A credit card spends the bank's money up to a limit, and the customer repays later. That one difference is why credit cards create overdue dues and debit cards almost never do.
Credit card dues are among the most common accounts sent to collections, both by phone and in the field. RBI's card rules decide when a card account can be reported as overdue, what the bill must show, and how collection agents must behave.
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Debit Card vs Credit Card
Whose money
Debit card
The customer's own balance
Credit card
A credit line from the card issuer
Linked to
Debit card
Savings or current account only
Credit card
A card account with a set credit limit
Bill
Debit card
No bill; money leaves the account at once
Credit card
Monthly statement with a due date
Interest
Debit card
None on spending
Credit card
Charged if the full bill is not paid by the due date
Can it go overdue?
Debit card
Not in normal use
Credit card
Yes, if at least the minimum amount due is not paid
| Point | Debit card | Credit card |
|---|---|---|
| Whose money | The customer's own balance | A credit line from the card issuer |
| Linked to | Savings or current account only | A card account with a set credit limit |
| Bill | No bill; money leaves the account at once | Monthly statement with a due date |
| Interest | None on spending | Charged if the full bill is not paid by the due date |
| Can it go overdue? | Not in normal use | Yes, if at least the minimum amount due is not paid |
Card Terms You Must Know
- Total amount due
- The full amount payable as per the statement at the end of the billing cycle.
- Minimum amount due (MAD)
- The smallest part of the bill the cardholder must pay so the bill is not treated as overdue. Interest still runs on the rest.
- Charge card
- A card where the full bill must be paid on the due date. No rolling over of credit to the next cycle.
- Add-on card
- A supplementary card for a family member or other named person. The principal cardholder carries the liability.
- Business credit card
- Issued to a business or individual for business expenses, not personal use.
- Unsolicited card
- A card issued without a written or digital request. Banned. If one is activated and billed without consent, the issuer must reverse the charges and pay a penalty of twice their value.
RBI Rules That Matter in Collections
From RBI's 2025 card Directions, which replaced the 2022 Master Direction with the same wording on these points.
- check_circleA card account can be reported as "past due" to a credit information company, or charged a late fee, only after it stays past due for more than three days. Days past due are counted from the payment due date on the statement.
- check_circleLate payment charges apply only to the amount still outstanding after the due date, not to the total bill.
- check_circleThe minimum amount due must be set so the balance cannot grow even when the MAD is paid (no negative amortisation). Every statement must warn that paying only the minimum stretches repayment with compounding interest.
- check_circleIf a cardholder disputes a bill, the issuer must give an explanation, with documents where relevant, within 30 days.
- check_circleBefore reporting a cardholder as a defaulter, the issuer must inform the cardholder. If the dues are later settled, the issuer must update the credit information company within 30 days of settlement.
- check_circleA closure request must be completed within seven working days once all dues are paid. Delay costs the issuer ₹500 per calendar day, payable to the cardholder.
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Your Name Reaches the Cardholder First
When a card issuer assigns an account to a recovery agent, it must give the cardholder the agent's name and contact details immediately. Every communication from the agent must carry the name, email, phone number and address of a senior officer of the issuer whom the customer can contact. Issuers may share with agents only the customer information needed for recovery.
Conduct in Card Collections
The card Directions say issuers and their agents must not intimidate or harass anyone, verbally or physically. They name specific banned acts: humiliating a cardholder in public, intruding on the privacy of family members, referees and friends, making threatening or anonymous calls, and making false or misleading statements.
Example: Priya's credit card bill of ₹38,000 has been unpaid since March. You may call her, explain the outstanding amount, the minimum due and the options the issuer offers. You may not call her office colleagues, hint that she will be arrested, or call from a number that hides who you are.
How the DRA Exam Tests This
Expect feature questions ("A card where the full amount must be paid every month is a ___ card"), rule questions ("A card account can be reported past due to a CIC only after ___ days") and conduct questions built on the banned acts. The trap: candidates confuse the minimum amount due with the total amount due, or think debit cards can be issued on a loan account. They cannot, except the overdraft on a Jan Dhan account or a Kisan Credit Card account, which RBI allows to be linked to a debit card.
FAQs
What happens if I pay only the minimum amount due on my credit card?expand_more
The account is not treated as overdue for that bill, but interest is charged on the unpaid balance. RBI requires every statement to warn that paying only the minimum stretches repayment over months or years.
When is a late credit card payment reported to CIBIL?expand_more
RBI's card rules allow an issuer to report a card account as past due to a credit information company only after it remains past due for more than three days, counted from the payment due date.
Can a credit card recovery agent call my family or friends?expand_more
RBI's card rules bar issuers and their agents from intruding on the privacy of the cardholder's family, referees and friends, and from threatening or anonymous calls.
How long does a bank take to close a credit card?expand_more
Seven working days from the request, provided all dues are paid. If the issuer delays, it must pay the cardholder ₹500 for each calendar day of delay.
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