According to the Reserve Bank of India (RBI) data, in April 2023, India had 8.6 crore outstanding credit cards – a statistic that shall cross the 10-crore mark by the end of 2023. While more Indians are embracing credit cards for the convenience and benefits, they offer, one must remember that paying with credit card dues is also a crucial duty. Credit cardholders need to form certain habits to ensure they make timely payments and avoid falling into a debt crisis.
Tips that credit card holders can follow to pay their bills on time:
Credit cardholders should evaluate their credit card eligibility and carefully read the terms and conditions set by the issuing bank or financial institution. Understanding the fine print is the first step to responsible credit card usage.
- Cardholders must use mobile banking apps to make payments:
Banks and credit card issuers provide user-friendly mobile apps that help cardholders check their credit card statement, view transaction history, and make payments effortlessly. Cardholders can easily make payments from their smartphones by setting up their card on a dedicated app. This convenience ensures that cardholders never miss a payment due date.
- Setting a reminder for upcoming payments always helps:
Cardholders can lose track of their credit card payment due dates because of their daily commitments. To avoid this pitfall, they can set reminders on their phones or use a calendar app to receive notifications before the due date. A prompt reminder can save a cardholder from late payment penalties and additional interest charges.
- Cardholders can contact the bank to set up automatic payments:
Most banks offer customers the option of setting up automatic payments. Cardholders can authorize their banks to deduct the minimum amount due or the outstanding balance from their linked account on the due date, reducing the risk of accumulating debt.
- Cardholders should pay more than the minimum amount due to avoid high interest charges:
Cardholders must assess their credit card eligibility and expenses before using their credit card. Unnecessary or impulsive purchases can lead to overspending and difficulty in repaying one’s credit card bills. Cardholders must limit their credit card usage to essential expenses and budget accordingly.
- Cardholders must analyze their expenses and use their card only when required:
Cardholders must practice restraint and assess their expenses before using their credit card. Unnecessary or impulsive purchases can lead to overspending and difficulty in repaying one’s credit card bills. Cardholders can limit their credit card usage to essential expenses and budget accordingly.
- Cardholders can pay their early bill to avoid overspending and any penalty charges:
Customers can pay their credit card bill ahead of the due date to manage their finances. Credit cardholders must temper their urge to overspend and minimize the risk of incurring penalty charges by clearing their dues early. Additionally, an early payment can reflect positively on a cardholder’s credit score.
Advantages of paying one’s credit card bill on time:
- Higher credit score: Timely credit card payments contribute to a positive credit history and a higher credit score. A good credit score opens doors to better interest rates on loans, higher credit limits, and more favorable financial opportunities.
- Debt avoidance: Paying on time ensures that customers avoid an accumulation of excessive debt.
- Special benefits: Some banks and credit card issuers offer rewards or special benefits to customers who consistently pay their bills on time. These perks can include cashback, reward points, or exclusive discounts on purchases.
While credit cards offer tremendous financial flexibility, customers must use them responsibly and make timely payments. Making prompt credit card payments is a simple yet powerful strategy for a cardholder to safeguard their financial well-being.