What are the effects of late payment for credit card

What are the effects of late payment for credit card

It is not prudent to keep and use a credit card, but it is prudent to use credit cards in a proper way. The mistake made in the credit bill payment can cause more damage. To know some important things before using the card.

If you are paying the credit card bill after the date, you should be careful before you make these mistakes. If you do not pay the bill on the due date, you will also have to pay a fine with more interest in paying the credit card dues. Make sure you have paid the entire credit card bill before or at the end of the due date. Even if you are asked to pay 5% of the mandatory payment on the due date, you pay 100%. Taking the dues forward may have to pay an interest rate of 36-42% per annum or even more.

Credit Card Rollover Balance:

Rolling over makes anyone have to pay a higher interest rate unless the entire outstanding on the card is fully paid. Moreover, the benefit of an interest-free period is not available. Usually, all credit cards give interest-free credit period on the card before the due date arrives, however, if the entire bill amount of the last time has not been paid, it does not get the benefit. Further, the period of interest-free loans may be from 20 to 50 days. However, this does not apply when the last month's balance has not been fully repaid, or the cardholder has availed cash from any ATM.

So, even if you have a balance of Rs 2,000 on your card and you make a new purchase in the next month, you won't get any interest on new purchases. Also, if one fails to pay the minimum amount payable, the penalty can be up to Rs 900, depending on the due amount. If you have an outstanding amount, it is better to pay the dues and then make a new purchase. If not cleared, the outstanding amount will be caught in the debt trap and will also harm your credit score.

Read also: Is your credit score low? Know here how to build a good credit score

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