Circular on Frequently Asked Questions Regarding the Rules for Issuance and Operation of Credit Cards

P.O Box 2992 Riyadh 11169 Kingdom of Saudi Arabia Tel: +966 11 463 3000 Classification:
Circular
Dear Sir/Madam,
Subject: FAQs on the Rules for Issuance and Operation of Credit Cards.

Referring to the Rules for Issuance and Operation of Credit Cards, communicated via Central Bank Circular No. 1069/11157 dated 23/12/1446H, Attached is a document containing the FAQs regarding the aforementioned Rules and their answers, which serve as a reference. It does not replace referring to the Rules nor is it binding, but serves as a guide. For your information and review, and to be published via available customer communication channels, in accordance with the Bank/Financing Company's approved identity. Yours sincerely, Yazid bin Ahmed Al-Sheikh Deputy Governor for Supervision

Distribution Scope:

• Banks and financial institutions operating in the Kingdom.
• Financing companies operating in the Kingdom.

Classification:
Public - عام
FAQs on the Rules for Issuance and Operation of Credit Cards 1447H - 2025M

Classification:
Public - عام
Table of Contents
Introduction
Questions and Answers

Classification:
Public - عام
Introduction:
This document contains FAQs on the Rules for Issuance and Operation of Credit Cards ("the Rules"), communicated via Central Bank Circular No. 1069/11157 dated 23/12/1446H.

It serves as a reference guide that does not replace referring to the Rules nor is it binding. In case of any conflict between this document and related regulations, laws, and instructions, reference shall be made to those regulations, laws, and instructions.

Questions and Answers:
Credit Card Issuance
Q1: Does the issuing entity have the right to issue a credit card without receiving an application from the customer?
A1: No, the issuing entity may issue a credit card only upon receiving a documented application from the customer.

Q2: What is the timeframe within which the issuing entity must issue a notification of acceptance or rejection for credit card issuance?
A2: The issuing entity must notify the customer via SMS within (three) working days from accepting or rejecting the credit card issuance. The notification must include reasons for rejection and the objection mechanism.

Q3: Does the issuing entity have the right to reissue a credit card?
A3: The issuing entity may reissue a credit card, provided it notifies the customer via SMS and enables the customer to accept or reject the reissued card. The customer is deemed to have accepted it if they do not object within (14) days from the notification date, or upon activating the card. The reissued card must maintain the same category, terms, conditions, fees, and costs as the original, except if issued upon the customer's request to upgrade or downgrade the card category.

Q4: Is it permissible for the issuing entity to issue an additional credit card held by a person other than the customer?
A4: Yes, the issuing entity may issue an additional credit card upon a documented customer request. The issuing entity is responsible for verifying the identity and information of the additional cardholder, in addition to notifying the customer of any transactions conducted via this card.

Q5: Is it permissible for the issuing entity to issue a credit card to individuals under (eighteen) Hijri years of age?
A5: No, the issuing entity may not issue a credit card to customers under (eighteen) Hijri years of age, except if the card is an additional card in accordance with Article (Six) of the Rules.

Classification:
Public - عام
Credit Card Fees and Costs
Q6: If fees, costs, or benefits specific to a credit card are modified, does the customer have the right to cancel the card and recover annual fees after deducting fees for the used period? A6: Yes, the customer has the right to cancel the credit card and recover annual fees after deducting fees for the used period, within (14) days from receiving the notification of modification to card terms and conditions, which include fees, costs, and benefits.

Q7: Does the issuing entity have the right to charge late payment fees if the customer pays only the minimum amount due within the grace period?
A7: No, the issuing entity may not charge late payment fees as long as the customer pays within the specified grace period, even if the payment is limited to only the minimum amount due.

Q8: Does the issuing entity have the right to calculate international purchase fees on cash withdrawals made outside the Kingdom of Saudi Arabia?
A8: No, the issuing entity may not calculate international purchase fees on cash withdrawals outside the Kingdom; it is sufficient to apply the specific transaction fee (cash withdrawal fee).

Q9: Does the issuing entity have the right to increase the agreed cost of financing with the customer due to late payment or default?
A9: No, the issuing entity may not increase the agreed cost of financing with the customer due to late payment or default.

Q10: Does the issuing entity have the right to calculate annual credit card fees before activation by the customer?
A10: No, the issuing entity may not calculate annual credit card fees before activation by the customer.

Q11: What are the transactions for which the issuing entity may collect international purchase fees?
A11: Card payments to electronic merchants and via point-of-sale (POS) terminals when the merchant is located outside the Kingdom of Saudi Arabia.

Q12: Does the issuing entity have the right to calculate a daily profit margin on cash withdrawals, transfers, and electronic wallet top-ups?
A12: No, the issuing entity may not calculate a daily profit margin on cash withdrawals, transfers, or electronic wallet top-ups. As stipulated in the Rules, the cardholder is granted a grace period of not less than (25) days from the statement issuance date, during which no financing cost or additional fees are charged.

Q13: Do digital payment companies and digital banks calculate top-up fees in the same way?
A13: No, there is a difference in fee calculation based on the transaction type, as clarified below:

1. Electronic wallet top-up using a credit card is free of charge.
2. Top-up to a digital bank account using a credit card is not considered an electronic wallet top-up and is subject to the transaction fees specified in the Rules.

Classification:
Public - عام
Repayment of Credit Card Amount Due
Q14: What is the period within which the customer can repay the amount due without incurring any fees or costs?
A14: The issuing entity must grant the customer a grace period of not less than (25) days from the statement issuance date to repay the amount due according to agreed repayment arrangements without incurring any fees or costs.

Q15: Is the issuing entity permitted to compel the customer to pay only the minimum amount due?
A15: The issuing entity is prohibited from compelling the customer to pay only the minimum amount due; it must provide all repayment options, including the option to repay the full amount due.

Credit Card Statement
Q16: When must the monthly credit card statement be issued?
A16: The issuing entity must provide the customer with a monthly credit card statement before (25) days from the due date, and must notify the customer via SMS containing the amount due, minimum payment, and due date.

Q17: What is the period within which the customer can object to an error in the statement?
A17: The customer may object to the statement within (30) days from the notification of statement issuance. The issuing entity must clarify the objection mechanism and available timeframe within the statement.

Q18: Is there a specific period that the issuing entity must comply with to process an objection regarding a statement error?
A18: The processing period for the objection must not exceed (90) days from the completion of the objection. The issuing entity may extend the period to (120) days from the completion of the objection if necessary, provided that the customer is notified.

Q19: Does the customer have the right to object to the issuing entity's result regarding the statement objection?
A19: Yes, the customer may object to the issuing entity's result regarding the objection. The issuing entity must state the objection and escalation mechanism when providing the customer with the result of its review.

Q20: Does the issuing entity have the right to claim amounts from the customer for transactions under objection before processing is completed?
A20: No, the issuing entity may not claim amounts for transactions under objection before processing is completed, unless the invalidity of those financial transactions is proven.

Classification:
Public - عام
Other
Q21: Must the issuing entity notify the customer if the credit card agreement is modified?
A21: Yes, the issuing entity must notify the customer via SMS before changes to credit card terms and conditions take effect for a period of not less than (30) days.

Q22: Does the customer have the right to cancel the credit card before the annual fee due date without incurring any costs?
A22: Yes, the issuing entity must notify the customer via SMS before the annual fee due date for a period of not less than 14 days, during which the customer may cancel the card without any fees.

Q23: Does the issuing entity have the right to modify terms and conditions related to promotional card benefits before their specified expiry?
A23: No, the issuing entity may not make any modifications to terms and conditions related to promotional card benefits within the card agreement before their specified expiry period.

Q24: What are the obligations of the issuing entity upon receiving notification from the customer regarding loss, theft, or unauthorized use of the credit card?
A24: The issuing entity must suspend the credit card immediately upon receiving notification of loss, theft, or unauthorized use, and notify the customer via SMS, providing a reference number to track the notification status. The issuing entity must also hold the amount of the transaction resulting from unauthorized use, and bears responsibility for credit card transactions after receiving the customer's notification.

Q25: The Rules stipulate the use of SMS for notifying customers in several places; what if the customer wishes to receive notifications via other reliable channels besides SMS? A25: SMS is the primary channel that the issuing entity must use to notify customers of financial transactions using a credit card and related procedures. Additional reliable channels may be used upon a documented customer request, provided that this does not replace SMS notifications.

Q26: Are electronic wallet top-up transactions using a credit card subject to the maximum limit for cash withdrawals specified in the Rules?
A26: Yes, electronic wallet top-up transactions using a credit card are subject to the maximum limit for cash withdrawals specified in the Rules, not exceeding 30% of the card's credit limit.

Q27: When does the issuing entity have the right to consider a customer as in default?
A27: A customer is considered in default if the minimum amount is not paid for a period exceeding (90) consecutive days. In this case, the issuing entity may suspend card usage and contact the customer to collect the amount due, provided that appropriate solutions are proposed to settle the amount before taking regulatory actions.