5 Reasons To Avoid Late Credit Card Payments
Missing payment of your credit card bill is bigger than you might think. Keep in mind that your card company won’t show up at your doorstep after you miss a payment, but they’re definitely taking action behind the scenes.
(Tip: The best way to pay credit card bill is online. Simple.)
When you have access to such cards, it gives you the complete freedom to purchase without worrying about your bank balance. But, it is pertinent to mention here that failure to make timely payments of credit card dues can lead an individual into a downward spiral of impending debt.
What are credit card payments?
A credit card bill payment is the process of settling the outstanding balance on a credit card account. When you use such a card to make any kind of purchase or withdraw cash advances, you are basically borrowing money from the card issuer.
This borrowed amount accumulates as a balance on your credit card account, and you are required to repay this balance by a specified due date in order to avoid any additional unnecessary charges.
What are the top five reasons to avoid late credit card payments?
1. Preserve Your Credit Score
Late payments can have a negative impact on your credit score. Your payment history is one of the most critical factors that credit bureaus consider while calculating your score. Therefore, consider timely payments to help you build a positive credit history, while late payments can lower your score.
2. Higher Interest Charges
When you, by any chance, make late payments, you’re not just subject to late fees; you also accrue interest on the unpaid balance. The rate of interest on credit cards can be high, so allowing interest to accumulate on your outstanding balance can be financially burdensome.
3. Avoid late fees
The issuers typically charge late payment fees when you fail to make at least the minimum payment by the due date. These fees can be substantial and add to your overall debt, making it hard to pay off your remaining balance amount.
4. Potential Account Closure
If you tend to repeat late payments and the issuer witnesses a pattern of financial irresponsibility, it can lead to your account closure. This can ultimately lead to hurt your credit score, reduce your available credit, and limit your financial flexibility.
5. Prevent Penalty APRs
When you avail a credit card, sometimes the issuer includes a penalty APR clause. If you consistently make late payments, there’s a chance that your card issuer may raise your rate of interest simply as a penalty.
How to pay a credit card bill?
It totally depends on the platform you are using. In the current era of digitisation, mobile applications are the most used ones. For over a year now, I’ve been using the Bajaj Finserv application, and believe me, it is super easy to use.
- Download the Bajaj Finserv application from the Google Play Store or Apple’s App Store.
- Sign up to create an account.
- Go to the ‘Financial Services and Taxes’ section and select Credit Card
- On that page, select the bank from which you got your credit card, enter your Credit Card number, and tap ‘Proceed.’
- Your bill will be automatically fetched, after which you can select your preferred payment mode and click ‘Pay.’
- Enter your payment details and complete the payment
I pay my credit card Kotak bill from this application and it is highly recommended!
