Using a credit card responsibly helps you to purchase products and services more affordably. For example, you can receive discounts on flight tickets, dining, movie tickets, retail purchases, online/offline purchases, and even free fuel. Credit cards also provide reward points which enable you to receive cashback and vouchers through redemption. You can convert these points into travel miles to avail offers on air tickets. These rewards and offers make credit cards one of the ideal financial instruments for transactions. However, you have to manage your expenses well to enjoy these lucrative benefits. You also have to make your credit card payment without defaulting.
Failing to Pay your Bills can Cause the Following:
Here we are listing down the tips and tricks on how to manage your first credit card payment. Check it carefully.
1. You have to Pay Finance Charges:
Credit cards come with a grace period within which you have to pay the bill. Failure to pay your dues within this period will attract finance charges or high rate of interest.
2. Your Credit Score will go Down:
Your dues on credit card have a direct impact on your credit score. The score will decrease if you fail to pay the bill within the due time and vice versa. Hence, paying your credit card bill is utmost critical if you want to avoid the above consequences.
Tips on How to Manage your First Credit Card Payment:
You can also refer to the list of best credit card in India. Here we are listing down the tips and tricks on how to manage your first credit card payment. Check it carefully.
1. Learn the Terms and Conditions:
Make sure to learn the terms and conditions of your credit card before applying. This will help you to avail an appropriate credit limit, plan your finances and clear off your dues without any hassle. Take a look at the following more closely:
1.a) Grace Period: The grace period is the total time you get to pay your bill. A typical credit card comes with a grace period of 45 days.
1.b) Rate of Interest or Finance Charges: The rate of interest or finance charges is applicable only when you can’t make the credit card payment within the grace period.
1.c) Charges: Your card comes with various charges like joining fee, annual fee, over-limit fee, overseas charges, etc.
2. Automate Payments:
Instruct your credit card company to deduct the bill from your account automatically. You can do so by providing a standing instruction to the lender if you hold an account with them.
Opt for an Electronic Clearance Service (ECS) in case your account exists with another financial institution. An ECS mandate enables you to link the credit card with your account.
Both standing instruction and ECS will help you make your credit card payment every month without your involvement.
3. Never Utilize more than 30% to 50% of your Upper Limit:
Keep your expenses within 30% to 50% of your credit limit every month. Doing so will help you make your payments comfortably and increase your credit score.
4. Pay the Total Amount Due:
Your monthly credit card statement includes the following due amounts:
4.a) Total Due: The total amount that you have spent using your card. It will also include taxes.
4.b) Minimum Due: A particular percentage of the total amount due which may also include interest. Pay this amount if you cannot clear the total amount due.
However, paying the minimum amount due decreases your credit score and the total outstanding gets forward in the next month’s statement. So, always try to pay the total amount due as it will increase your CIBIL score significantly.
What to do When you can’t Pay the Total Credit Card Payment?
Credit card companies give you the option to pay the full amount in EMIs. You will incur interest on these EMIs; however, the rates are considerably lower than finance charges. Do note that your credit score might be affected when you pay off the debt as EMIs. One such credit card offering this facility is the credit card. This credit card also brings exciting industry-first features like cash withdrawal from ATMs and repayment with 0% interest and emergency loan up to 50 days and 90 days respectively. Furthermore, you can get a welcome bonus of 20,000 points and complimentary access to airport lounges up to 8 times a year.
5. Redeem your Reward Points:
You can redeem your reward points for cash. Doing so will lower your credit card debt. Converting the points for cash will reflect as a cashback on your bill.
Credit cards like the Bajaj Finserv RBL Bank SuperCard provide up to 2 reward points for every Rs. 100 that you spend.
Bajaj Finserv also brings pre-approved offers that make the process of availing these credit cards hassle-free and save you time. Pre-approved offers come with personal loans, home loans, business loans, and numerous other financial products and services as well. Check your pre-approved offer by providing only a few essential details.
Make sure to keep the above points in mind if you are opting for an instant credit card. You should know how to manage your first credit card payment.