Top 4 Things to Remember About Credit Card Bill Payment

Credit cards are an essential financial instrument these days. People are highly dependent on credit cards for their day-to-day expenses. Credit cards work almost everywhere, from shopping to other essential payments, which is why they are commonly preferred.

A credit card allows you to pay expenses as a credit that you need to pay back at the end of each credit card billing cycle. After each cycle, a credit card bill is generated that entails the description of the total and minimum amount due to be paid and the interest charged.

What does the credit card bill include?

Credit card bills are generated on the credit card bill generation date. This has information about your expenses in a month and other amounts regarding your bill. Generally, the bill has information about the amount due and the date by which it can be paid. The rest is the information about the result that has been calculated by advanced computations.

Four things to remember while paying the credit card bill

If you are a proud owner of a credit card, it is important to remember the following about credit card bills:

 

1. The information included in the credit card bill

One must know what is included in the credit card bill. It may contain information about the total payments, total purchases made in a particular billing cycle, credit card due date, and other information related to spending behaviour. It may further include information about:

• Total balance

The total balance consists of unpaid bills of the last payment cycle and the current bill balance.

 

• Cash advances

If the holder withdraws any amount from the ATM, this may be charged and is termed as cash advances.

 

• Balance transfer

One can transfer their dues from one card to another. This is termed as balance transfer. It has charges associated with it.

 

• Interest

This includes the total interest to be paid on your due amount of the credit card bill.

2. The exact amount to be paid

The bill may include total payment due, minimum due, etc., but the credit card holders must understand how much to be paid to continue using a credit card. One must make sure to repay the minimum due amount so that no additional charges or extra expenses are to be paid on credit cards. The holder must make the payment of the bill before the due date. Failing to do so may cost relevant charges on the total amount.

To pay credit cards bill, it is important to understand the following:

Minimum amount due: Minimum amount due is the lowest amount one needs to pay to continue receiving the credit from the bank to hold the credit card. It is usually calculated with the following formula:

Minimum payment = Interest + 1% total balance due

 

3. Consequences of missed payment

One must remember that they do not miss any payment. If a holder pays a credit card bill after the due date, he will be charged a subsequent amount by the credit card companies. This is generally based on the time a holder takes to repay the due amount.

 

4. Calculation of the final bill

Remember to check the final closure amount in the bill on the generated date so that it can be paid on time. For maintaining a good standing, it is important to pay the minimum due as generated in the credit card bill. The credit card bills are usually generated on the basis of the total expenses made by the holder in a month. To pay the bills, it is important to check the credit card billing cycle and due date.

When the minimum due amount is paid, the rest is added to the next monthly cycle. The bill is then divided into the following ways:

• The amount carried forward from the previous month needs to be paid first

• Any amount that has high charges or interest rates needs to be paid first

• If you pay in full right at the due date, no division is required, and no extra charges are to be paid

Pros & Cons of not knowing Enough

Being unaware of the basics of how a credit card works can lead to misinformation and heartburn for you as a customer. You would not only be missing out on paying the bill on time but many other benefits; let’s take a look:

1. It is ideally suggested to pay the total amount each month so that no interest is charged on any due amount.

2. A perfect habit of paying your dues with your credit card can help to stay in the ideal state to keep using credit cards and keep receiving credit in the future.

3. The late payment penalties are generally quite high.

4. The higher the delay in paying the dues, the more will be the charges incurred.

5. Making the payment after the credit card payment due date may negatively impact your credit score and can restrict you from obtaining further loans.

6. When you take cash advances, you immediately start to accrue a high interest on the amount.

7. Regularly exceeding your credit limit, not paying the dues on time can hamper your CIBIL score.

In Conclusion

There is a set billing cycle in credit cards on the basis of which the payment is calculated. At the end of each billing cycle, the credit card bills generate a total bill that has basic information about the total amount to be paid and the minimum amount due to be paid on your credit card.

To continue using a credit card, the minimum amount must be paid before the due date. This will help you keep in good standing for credit. The rest is accumulated for the next billing cycle. It is advised to only take credit when you have the capability to pay it back.

Bajaj Markets offer you a lot of choices when it comes to picking the right credit card. Other than that, in case you are falling short or are struggling with the repayment process, get in touch with our customer care, and we will help you out.