Here’s All You Need to Know about Credit Card Bill Payment
The use of modern financial instruments such as credit cards has become widespread in India. In 2019, the country’s total number of credit card users crossed the 52 million mark. Moreover, as per recent stats, India’s credit card industry is estimated to grow at a CAGR of more than 25% between 2020 and 2025.
Credit cards have been instrumental in increasing the purchasing power of individuals by allowing them to divide their purchases into easy installments. Additionally, they also provide financial support during urgent needs. However, individuals must know how to make their credit card payments to maintain a healthy credit score and avoid penalties.
Some essential terms concerning credit card bill payment
All credit card users should have a clear idea about these terms regarding credit card payments to manage their debt more effectively:
- Billing cycle
The billing cycle is the timeframe within which a credit card bill is generated and paid. Individuals must have a clear understanding of the billing cycle to utilize the interest-free period. One can make a substantial amount of purchase at the start of the billing cycle and make the most of the interest-free period, ranging up to 50 days.
However, credit card users will not be eligible for the interest-free period to its fullest extent by spending toward the end of a billing cycle.
- Grace period
A grace period is a timeframe between the end of the billing cycle and the credit card payment due date and you can pay your amount by online credit card payment option. It enables a credit card user to delay their payment for a few days without paying any penalty or late fee charges. Proper knowledge of how to repay your credit card debt is crucial when trying to clear dues within this grace period.
- Credit card statement
A credit card statement consists of a breakdown of all transactions made using the card in a particular month. Moreover, it also provides other information such as minimum amount due, dates of the transactions, available credit limit, and more. Although the format might seem intimidating, individuals must learn how to read a credit card statement correctly to identify their spending patterns and spot inaccuracies.
- Minimum payment
Minimum payment refers to the least amount an individual has to pay on or before the credit card payment date to avoid interest charges. Once an individual makes the minimum payment, the remaining outstanding balance amount is transferred to your next month’s bill. It is advisable to pay off the full outstanding amount for the billing cycle, as failing to do so can increase the financial burden in the subsequent billing cycles.
Repaying the outstanding balance and maintaining a credit card account often becomes a challenge if a credit card issuer levies a high-interest rate. However, with the advent of more innovative credit cards such as the variants of the Bajaj Finserv RBL Bank SuperCard, making repayments on time has become more convenient.
This card has a hassle-free application procedure and allows individuals to avail of a credit card loan by converting their pre-approved credit limit into a personal loan with a minimal interest rate of 1.16% per month.
Moreover, financial institutions such as Bajaj Finserv provide pre-approved offers on different financial products like credit cards and business loans which can be availed to finance urgent requirements. Check your pre-approved offer in a few seconds by providing your name and contact number.
- Payment due date
Payment due date refers to the date by which individuals need to pay their outstanding amount on their credit card. Individuals who fail to make the payment by that time have to pay penalties, and additional charges might be applicable.
Once an individual is able to grasp these concepts, he or she can make the credit card payment on time and manage debts more efficiently.