Billing of Credit Cards

Did you know?

If you miss a payment of your monthly credit card dues by the due date, even if you make a partial payment, you could be charged interest on the whole due amount (as in the statement), starting from the date of purchase. Therefore, NEVER miss your payment, and ALWAYS pay the full amount. That “minimum amount due” doesn’t do much for you, except maybe maintaining your credit score.

eg: Suppose you made a purchase on 10th April worth Rs.15000 and your statement is generated on 30th April. Then your due date will very likely be 20th May. If you pay Rs.5000 by 20th May, your payable interest on 21st May will be Rupees 42 * IPD * 15000, where IPD is the interest rate per day, which is your monthly interest rate / no. of days in a month.

Notice how the Rs.5000 you paid wasn’t deducted from Rs.15000 and also, your interest is calculated from 10th April itself, until 21st May.

You should always check with your bank for the exact TnC, but beware of terms like “outstanding balance” in the TnC, and ask for clarification whether it’s the total OB on the statement, or is it the OB after partial payment. Imagine falling short in payment by 1 rupee and having to pay interest on the whole amount!!

Don’t avail of the moratorium on credit card payment. You will regret it.

Use your credit card wisely and try to avoid payments from credit card & specially in India, because we Indians believes in Saving but the term of Credit is not so good. Credit Card is for your emergency time.