According to a recent study, the credit card market in India is predicted to grow at a CAGR of 25% between 2020 and 2025. These cards are slowly becoming the most sought after payment tool owing to attractive features such as ease of transaction, increased purchasing power, accelerated reward points, a simple process of credit card apply online, and so on.
However, to make the most of these benefits, one must remember to pay off the monthly bills of his/her credit card before payment due date.
If a credit card bill remains unpaid even after the payment due date, it can lead to multiple consequences that can not only hurt one’s credit profile but also create an unnecessary strain on the finances.
Take a look at some typical reasons that make timely credit card bill payment essential.
- Non-payment of Bill Attracts Interest at High Rates
Since credit cards are a type of unsecured funding, the risk of default is also high. Accordingly, lending institutions also charge a substantial interest rate if a credit card bill remains unpaid even after the due date.
Therefore, to avoid incurring high interest on the outstanding amount, it is necessary to pay off the total outstanding amount within the last date.
- It Also Attracts Additional Charges Levy
If an individual fails to pay the outstanding amount on their credit card by the due date, then the card issuer also levies a late payment fee alongside the interest. Such fee is levied as a percentage of the bill due and can amount to sizable money, thus creating unnecessary financial liability.
Also, some cardholders choose to pay the minimum amount due instead of the total amount due to avoid the penalty charge. Nevertheless, they should note that although such minimum amount payment helps avoid any penalty, interest is still applicable to the amount at a high rate.
It is thus suggested that cardholders opt to pay the total amount due instead of the minimum amount.
- Missing Credit Card Bill Payment Hurts the CIBIL Score
A CIBIL or credit score is a numerical summarisation of an individual’s credit report. While calculating a credit score, repayment history is one of the significant factors taken into consideration. For instance, late or missed payment of credit card bills and loan EMIs result in significantly hurting the score.
Furthermore, late payments also leave a negative impact on the credit report. It is thus advised to make a timely bill payment. Contrarily, individuals can also use a credit card to improve their credit score.
- Reduction in Credit Limit
Credit cards come with a pre-set limit for fund utilisation. When any transaction is made with the card, it results in a reduction of this limit. It is also restored in the next billing cycle to an extent the outstanding amount is paid by the cardholder.
Thus, if individuals opt to pay only the minimum amount due, it will also result in a credit limit reduction by the amount that remains unpaid, thus restricting the individual’s capacity to spend.
Borrowers should, therefore, make sure to pay off the total amount within the due date. Some of the ways via which individuals can complete their credit card bill payment for cards like SuperCard have been given below
- Offline Mode
Individuals can pay their credit card bill via offline modes like cheque or cash. For cheque payment, it should be drawn in the name of the lending institution. As for the latter, individuals should visit the lender’s branch to pay off the bill amount.
- Online mode –
Some of the online credit card payment options through which users can repay their credit card outstanding are –
- NEFT
- Net Banking
- NACH Facility
- Mobile app
- Bill desk
Apart from online payment facilities, financial institutions also provide pre-approved offers to customers for a seamless credit card application procedure. Besides credit cards, such offers can be availed on other financial products too, such as business loans, personal loans, etc.
You can check your pre-approved offer by entering minimal details like your name and contact number.
Therefore, if credit cards are used responsibly, and the bill is paid off by the due date, it will help users to build a positive repayment history.
So, before going for a credit card application online, one should ask important questions such as why they need the card, how much credit limit they require, how to get the most out of their credit card, and so on.
They should also go through eligibility criteria and documents required before proceeding with credit card apply online process.
