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All about credit cards
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Managing credit card bills and payments
Managing credit cards
As we march toward a larger reliance on credit, credit card bills have become a key feature in most of our lives. Credit card bills often include a list of information, some of which is understandable and the rest of which may look like the result of complex calculations that you may have a tough time comprehending.
For the most part, the most significant portions of a credit card statement are the ones that tell us how much money we owe and when we have to pay it. However, there is a lot more to a credit card statement, and understanding all of the components might help you avoid missing bill payments or losing out on privileges that your card may provide.
Simultaneously, it is also important to manage your credit card bills and payments effectively. So, here are some tips and tricks that can help you with the same.
Take into account a balance transfer facility
If you're already stuck in a poor debt cycle, a balance transfer or shifting your debts from one card to another is your best alternative. You may move your balance from one card to another or from numerous cards to a single card using balance transfer. This provides you with temporary debt relief. The latter bank offers a credit-free period of up to 90 days to make it simpler to settle your outstanding balance. When the credit period expires, the cardholder will be charged normal interest.
- Convert a payment into a series of EMIs
If you are unable to settle your credit card balance, contact your bank and request that the balance be converted into monthly EMIs. Banks, on the other hand, levy a monthly interest rate of 2% to 3% for offering the EMI option. There will additionally be a processing charge of around 1-2 percent of the outstanding balance.
- Prioritize paying off loans with the highest interest rates
This is something that many people overlook. When you have bills on many cards, most individuals will pay the one with the earliest due date first. Clearly, this is a bad strategy. Pay off the loans on the credit card with the highest interest rate first. This lowers your overall interest expense since unpaid dues with higher interest rates accrue interest more quickly.
- Make the most of the festive season
Taking full advantage of the festive season is the greatest approach to manage your credit cards. You may be eligible for up to 50 days of interest-free credit on your card, depending on your payment cycle and the day you make a transaction. So, if you're in a brief financial bind, make scheduled purchases on your credit cards to get the most out of your vacation and avoid paying interest.
- Pay more than the bare minimum
Many cardholders adhere to the habit of paying just the minimal amount due. As a consequence of their rising obligations, many borrowers find themselves trapped in a never-ending debt cycle. Also keep in mind that credit cards have a very high interest rate, so paying merely the minimum due amount will only increase your outstanding balance at an exponential pace, depending on how much you owe.
- Think about using the Automatic Payment Facility
Because credit cards have a high interest rate and a late payment charge, using an automated payment service to prevent missing bill payments is suggested. You won't have to worry about missing payback dates if you're traveling or don't have access to your bank since the bill amounts will be withdrawn from your account without your personal action.
- Understand your billing cycle
Make sure you understand your credit card billing cycle to get the most out of your credit-free time. For example, if your card provides you a 30-day credit-free period, it begins on the first day of the monthly payment cycle, not the day of your transaction. So, if your card's payment cycle begins on the 10th of every month, any purchase made on the 9th will only provide you one day of interest-free credit, however any purchase made on the 11th would give you 59 days of interest-free credit. Knowing your bill cycle allows you to better plan your purchases and manage your credit card payments.
- Keep track of your bills on a regular basis
If you're one of those people who files their monthly credit card bills in a drawer without looking at them, you could be in for a harsh awakening. The bank may levy additional fees, or erroneous transactions may cause your card's due amount to be skewed. There may also be fraudulent transactions carried out by unscrupulous individuals who have obtained your credit card's PIN or access credentials. These things might easily trap you in a financial trap.
Credit cards are a fantastic financial tool when utilized properly. By following the above-mentioned advice, you can ensure that your credit card payments are completed on time, reducing your risks of encountering financial calamity as a result of plastic money.
A quick recap
- Take into account a balance transfer facility and convert a payment into a series of EMIs.
- Speak with your credit card company and prioritize paying off loans with the highest interest rates.
- Pay more than the bare minimum and make the most of the festive season.
- Understand your billing cycle and consider using the Automatic Payment Facility.
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