If you are looking to purchase electronic goods, durable items, or anything ahead of Diwali using your credit card, then remember not to miss your dues. It’s important for credit card users to ensure that they pay credit card bills on priority to avoid any penalties or high-interest rates. If you fail to make the payment on time, it may also impact your credit score.
Despite being aware of these consequences, there are times when you miss the credit card payment due date owing to multiple reasons such as cash crunch or emergency situations.
ALSO READ: Jio Surpasses BSNL To Become Largest Fixed-Line Service Provider In August: Trai (abplive.com)
Things to know about credit card bill payment
In case you end up missing the deadline for credit card dues, the credit card issuer can report your account as ‘past due to credit information companies (CICs), according to the Reserve Bank of India’s (RBI) guidelines. It gets reported if the amount remains unpaid for more than three days from the due date.
Since credit reports and scores play a big role in lending purposes, with a grace period of three days, you will have more time to pay the bill before a late payment lowers your creditworthiness.
In addition, the issuer can also levy a penalty charge or late payment fee.
The issuer needs to calculate the number of ‘days past due’ and the penalty charges from the payment due date, as mentioned in the credit card statement.
Apart from this the penal interest or late payment charges are levied only on the outstanding amount that the credit card holder has failed to pay and not on the total amount. It is also important to note that a credit card issuer can change these charges only after giving the credit card holders a prior notice of at least a month.
You can also choose to surrender your credit card after paying all dues. In such cases, the issuer cannot levy any extra charge on you for closing the credit card account.
When you apply for account closure, the issuer must process your request within seven working days as per the RBI mandate.
If the issuer fails to complete the closure process within the mentioned period, it is liable to pay you Rs 500 per day as a penalty for the delay until the credit card account is closed.