Follow This To Manage Your Credit Card Bills
Follow This to Manage Your Credit Card Bills
Credit cards not only increase the users’ purchasing power but also help them earn value back (in the form of reward points, cashbacks, etc.) on their spends. However, amidst these benefits, cardholders must remember that their credit card at the end of the day is a credit facility that when utilised will have to be paid back before its due date.
Any delays in making the credit card bill payments will attract late payment charges and partial or non-payment of these bills will lead to finance charges, which can go as high as 49% p.a. To avoid attract such charges and penalties, here are a few things you can do to manage your credit card bills efficiently:
01. Know your credit card billing cycle
To manage your credit card bills, you must know your billing cycle so that you can plan your expenses accordingly and have enough time to make the bill payment. A credit card usually has a 30-day billing cycle after which the card provider shares the credit card statement/bill.
Post bill generation, you may get another 15 to 20 days till the due date to make your bill payment (the last date to pay your credit card bill), thus, giving you a total of 45-50 days of interest free period on your credit card.
02. Read your credit card statements
Your credit card statement shows your card transaction details along with other information such as total reward points, available credit limit, bill due date, etc. To ensure that there are no unauthorized transactions on your credit card, you must check your credit card statements carefully.
On finding any such error, you must reach your card provider immediately and get it rectified. Ignoring such transaction errors will not only hurt your finances but may also negatively impact your credit score.
03. Pay your credit card bills full and by their due dates
To avoid late payment fees, finance charges and other penalties, make sure to pay your credit card bills by its due date. Also, if you follow personal finance blogging websites like Finshastra or use finance management related mobile apps, then you must be aware that not paying your credit card bills by their due dates will also impact your credit score, thereby, limiting your credit options in future.
Moreover, if you believe that it is enough to pay the minimum amount due for now and revolve the outstanding balance to the next billing cycle, then you couldn’t be more wrong. When you pay the minimum amount due instead of your total credit card bill amount, you start attracting finances charges on the unpaid balances.
These charges get compounded daily till you clear all of your outstanding dues. Also, while you have the unpaid balances reflecting in your credit card account, the interest-free period becomes invalid. So, all your new purchases will also start attracting finance charges from the day of transaction, which can easily lead to major debt over time.
04. Convert outstanding amount into EMI
Due to some reason if you are unable to pay your credit card bill in full then you can consider converting your entire outstanding amount or a part of it into EMIs. Most card issuers allow their customers to convert their outstanding credit card bill amount into EMIs. The interest levied on these EMIs is much lower than the finance charged levied on unpaid balance.
Hence, opting for EMI conversion is a great as it allows you to break your large bill amount into smaller affordable instalments. As the terms and conditions related to EMIs varies across lenders, all purchases may not be eligible for EMI conversion. Hence, do your research or check with your card provider regarding such conditions.
05. Opt for balance transfer facility
Credit card balance transfer facility allows cardholders to transfer their outstanding credit card balances from one credit card to another and pay them off in easy instalments. Credit card providers charge interest on balance transfer but those rates are much lower than the finance charges you would have to pay if you continue making partial payments to your credit card bills.
Some banks may also offer an introductory zero interest offer on balance transfers but you should exercise caution when availing such offers. Also, enquire your credit card provider about the interest applicable when the introductory period ends.
