Coronavirus lockdown: CRED founder Kunal Shah has an important credit card message for you

NEW DELHI: The Reserve Bank of India (RBI) has announced a three-month moratorium on all types of payments, loans, and credit cards bills between March 31 and May 31 to help during the coronavirus outbreak.However, it may not be a good idea to delay your loan repayments and EMIs. CRED founder Kunal Shah suggests that credit card users should try to repay in full on time if they can to avoid paying high interest rates later.For those unaware, CRED is a members-only credit card payment app.
“Impact of RBI announcement on Credit Card repayments : try to pay full amounts due as interest during this period can be very high and is NOT waived off,” tweet Shah. In fact even the RBI has clarified that “the accumulated accrued interest shall be recovered immediately after the completion of this period.”

Explaining what this actually means, CRED in a statement said, “Please note that the moratorium does not apply to interest charges. If you have Rs 1,00,000 due as on 3rd March 2020 and you take advantage of the moratorium till 31st May 2020, the dues payable on 3rd June 2020 could be as high as Rs 1,15,000 (Rs 1,00,000 (due amount) + Rs 15,000 (interest amount and other charges)).”
“CRED recommends that you continue paying your total due amount (or as much as possible) within the due date to avoid interest charges @ 36 - 42% compounding annual interest rate, if you can,” it added.
As far as personal credit rating is concerned, it said, “Exercising this option may not impact your credit score since the banks may not report it as a “default” to RBI recognized credit bureaus. More clarifications are expected from the RBI and banking institutions.”