All About Online Auto Debit Credit Card Bill Payment

From OTT subscription to paying monthly broadband bills, there are many expenditures in our modern lifestyle that demand recurring payments weekly, monthly, or quarterly. It becomes very tedious to remember all the renewal dates and separately make payments for each of them. The biggest nightmare of this process is receiving OTP within the small time frame before the payment gateway window expires.

Can you relate to that? If yes, then you have reached the right place. In this blog, you will get to know everything about the hassle-free automatic debit of payments directly from your bank account. Let’s dive in!

Auto debit credit card payment facility is a convenient and hassle-free way of making payments from your debit or credit card, which automatically gets charged to your bank balance. You no longer have to stick to the conventional ways of writing a check to the recipient of money or making a long process of manually paying by entering the bank details of the supplier or service provider. This feature eliminates the possibility of errors that occur while entering lengthy bank account numbers.

Almost all the banks in India provide the automatic debit payments facility, whether public or private. 

Do we need to emphasise how beneficial the auto-debit in credit card facility is? We don’t think so! Instead, we will just list some of the benefits down for you to go through.

• Time-Saving:

You can ensure that the recurring credit card payments are consistently made from your account, which saves a lot of time every month.

• Avoid Late Fee:

Many vendors charge you a penalty for making payments after the due date. With this facility, you can save yourself from the unnecessary expenditure on fines, penalties, and interest.

• Convenience:

This facility is one of the modern boons. It is the most convenient way in today’s times where most of the platforms involve weekly, monthly, quarterly, or yearly subscription charges.

• Reduced Risk:

Automatic debit from bank account reduces the risk of identity theft and brings it down to negligible as no one else can misuse the payment.

• Flexibility:

Under this facility, you are flexible to use either of the two payment methods, TAD or MDA. ‘TAD’ stands for the total amount due, and ‘MDA’ stands for the minimum due amount.

All banks have slightly different procedures to follow to activate and deactivate auto-debit facilities on their customers’ debit and credit cards.

Some banks require a physical or virtual form to be filled, whereas others simply require logging on to their portal and facilitating activation or deactivation with a few simple clicks.

The prerequisite for the auto-debit facility is that you need to have an active account with the bank, where all minimum balance and eKYC verification requirements have been fulfilled. You need to have a valid debit or credit card in your name. You also need to mention the type of payment option, TAD or MDA, at the time of activation.

Effective October 1, 2021, banks are required to notify their customers at least 24 hours before the automatic debit payment is initiated. Prior notification is sent to the cardholder before allowing the transaction to debit the amount from the cardholder's account. The notification will inform about the name, transaction amount, date of debit, the purpose for debit, etc.

It shall be at the discretion of the cardholder whether to let the payment pass through or cancel it. This new rule is applicable only in the case of transactions that demand a debit of Rs. 5,000 or more. All transactions amounting up to Rs. 4,999 does not require this new mandate approval and shall continue to function like earlier.

In case you are investing in a mutual fund, this new rule shall not affect the auto-debit of monthly SIP payments from your account. Also, in case of payment of premiums for insurance as well, this new rule shall override the mandate criteria even if the payment is for more than Rs. 5,000.

Apart from all the benefits we saw about automatic debit payments, the one that affects our record is the ability to pay credit card bills on time. Late payment of credit card bills not only charges your high-interest cost, but it also affects your credit rating, which in turn affects your loan-taking ability.