Credit card late payment charges are one of the charges an issuer levies when you don’t clear your bills on time. While credit cards offer many benefits, these charges can increase your financial burden. Therefore, you must be careful of them.
Nevertheless, knowing the charges for late payment is crucial when you have to deal with unexpected financial obligations. Moreover, this helps you know the benefits of avoiding credit card charges for late payments!
Read on to learn about late payment penalties and more.
Whenever you make a transaction from your credit card, the amount is added to your outstanding balance. This amount dictates your minimum due amount, credit card late payment charges and other billing details. You can find all this information in your credit card statement.
Issuers decide this penalty amount based on the total outstanding balance and their internal policies. Considering this, you must keep your credit card usage to a minimum to avoid a high penalty on your card. Thankfully, lenders allow you to avoid the penalty by paying the minimum dues.
Also Read: Learn To Use Credit Card Responsibly
Here are a few reasons why you should pay your credit card bill on or before the due date:
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Now that you know why you should pay your bills on time, here are a few tips on how to implement it:
Auto-debit is an opt-in facility where you give the card issuer permission to deduct the billing amount from your savings account. Opting for it can help you pay your bills on time as per the due date. However, make sure you maintain the required balance in your account for the transaction to go through.
Life can be full of surprises, so it is possible that you may fall short of cash once in a while. In such cases, issues allow you to pay only the minimum due on your total bill and avoid late payment charges. The minimum due amount is generally 5% of the total outstanding balance. Paying this amount keeps your card active, so you can continue using its services.
Note your bill payment date and set a reminder on your calendar, via email or on your phone. You can also set the reminder a few days before the due date. This will give you the time to arrange the required cash if needed.
In case you are unable to pay on the due date, it is best to talk with your card issuer for an extension. Note that issuers only levy late payment charges three days after the due date, as per RBI guidelines. But if you need more time, informing your card issuer and getting their confirmation is important.
Armed with this knowledge, avoiding credit card late payment charges is easy. If you plan to get a credit card with attractive benefits, look no further, as the most-awaited Fibe Axis Bank Credit Card is here!
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The credit card charges for late payment depend on your card issuer’s policies. They are calculated based on your total due amount. So, if you have a high outstanding balance, your late payment penalties may be higher and vice versa.
In this case, you will have to pay the penalty levied by your issuer. You can also talk to the issuer’s representative via customer care to see if you can get an extension.
As per the mandate by the Reserve Bank of India, credit card issuers can charge a penalty only after three days past the due date. So, if you are 1 day late on paying your credit card bill, the card issuer will mark your bill as ‘past due.’ However, they will not add late charges.