It may be tempting to delay your credit card payments for a few days, especially when you are low on funds and have several other bill payments due. Sometimes, knowing the consequences may push you to pay off your credit card bills on time. There are various credit card or UPI payment apps to facilitate paying bills on time.
You need to select a payment online app that suits you the best. You may rationalise a late penalty or live with a late fee increase, or bear an adverse impact on your credit score from delayed payments. More importantly, the focus should be on the benefits of paying your bills on time:
Enjoy a lower interest rate:
Delayed payments may cost you a lower interest rate. Credit card issuers can increase your interest rate if you get late for more than 60 days on paying your credit card bills. The penalty rate for late payments is a staggering 30%. Therefore, credit card issuers can hike your interest rate on any other credit cards you have with them, even when you are on good terms with paying those bills.
Avoid late penalties:
You can avoid late penalties by paying your credit card bills diligently. Pay your credit card bills on time before the due date to avoid the risk of missing the payment due date.
Boost your credit score:
Around 35% of your credit score depends on whether you have paid your credit card bills on time. Your credit score proves to be the most advantageous if you continuously make your credit card payments and all other payments on time.
Credit cards provide users with a predefined limit that they can utilise to make payments on their purchases. The financial institution determines this card limit and depends on the customer’s credit score and monthly salary. It is recommended that customers make timely payments in full to maintain a decent CIBIL score.
One of the fastest and safest ways to pay your credit card bills is through a UPI app. Customers can also opt for other modes, such as net banking, NEFT, etc., so that the payment gets cleared some days before the due date, assuring the users that the bills are paid on time.
It is suggested that the credit card bills get paid off before the due date so that there is sufficient time for the clearance of payment and to redeem if the payment gets bounced due to any reason. Depending on the mode of payment, credit card payments may take a few minutes – as for payment UPI and ATM – to around 3-4 working days – for cheques to reflect in the credit card account.
In conclusion, credit cards can be a great way to develop a strong credit history, but it is important to avoid overstretching yourself and getting trapped in deep credit card debt. You can pay off the minimum amount every month since that is better than completely missing the payment. However, paying the full balance every month will give you the benefit and convenience of owning a credit card at a minimal cost.
