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  • Credit Card Bill- a Better Understanding

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  • Credit card bills have become a staple of most of our lives as we move towards a growing dependence on credit. Credit card bills usually contain a list of information, some of it intelligible, while the rest appears to be the result of advance computations that you will never understand.

    For most of us, the most important sections of a credit card bill are the ones that inform us of the total amount due and the date by which that amount is to be paid.

    There is a lot more to a credit card, bill, however, and knowing all the components of your bill can help ensure you don’t miss bill payments or lose out on perks that your card might offer you.

    What’s My Credit Card Bill Contain

    Besides just the amount due and the total purchases made during that period of time, a credit card bill contains a list of other information relating to your purchases and spending habits. Along with these, additional charges and fees are also a feature, and one you should be aware of, especially since these could raise the total amount you have due quite exponentially.

    The charges that are reflected in your credit card bill are as given below:

    Previous and Purchase Balances

    The biggest portion of your monthly credit card bill will consist of the previous and current purchase balances you have made over the course of your billing cycle. These charges comprise of any outstanding bills (amount left unpaid from your last bill) and your current bill charges.

    Cash Advances

    Using your credit card to withdraw money from an ATM would result in a cash advance charge, which is displayed as a ‘cash advance’ on your credit card. Such a transaction would attract interest immediately, and does not have a free-look period. Cash advances also attract higher interest rates and should be avoided unless absolutely necessary.

    Balance Transfers

    A credit card enables you to transfer your debt from one card/multiple cards to other cards. Doing this will result in the debt being added or transferred to the other card and does not cancel the debt. If you have moved debt from another card to this card, it will reflect along with the interest charges associated with it in your bill.

    Interest

    One of the most important aspects of a credit card bill, the interest due is the charge associated with taking money on credit. In other words, it can be viewed as the charges for what is essentially a loan. Failure to pay your due amount each month will result in the balance amount being carried forward to your next billing cycle, along with interest charges on that amount. Thus, your current bill will display the amount due based on your purchases charged to the card during this period as well as the interest and balance that was carried forward, if any.

    Fees

    Credit cards usually always come with a laundry list of fees, some of them more obvious than the rest. Some of the fees associated with your credit card are listed below:

    • Annual fee- this is akin to a membership fee and is levied once a year. In some cases, the fee can be broken up over bill cycles to ease the burden of paying the whole amount at once. In this case, it can be referred to as a ‘monthly fee’. Some cards waive off the annual fee if certain criteria are met, while others do not have an annual fee.
    • Transaction fee- a transaction fee is a charge levied on certain types of transactions. The most common transactions that attract a fee are balance transfers and cash advances. Using your credit card abroad can also attract fees. The fee percentage charged would depend on your credit card type and the bank.
    • Penalty fee- a penalty fee is levied on actions such as missing a credit card bill payment, using your card over your assigned credit limit or having a payment withdrawn due to insufficient funds.

    How to Pay Your Credit Card Bill

    After receiving your credit card bill, you should ideally try to pay off the entire amount before the due date to avoid attracting interest charges on your next bill. In this way, you will avoid having to pay off ever-increasing amounts due to various fees and charges being added to your bill each billing cycle. Your credit card bill will have a section titled ‘Minimum Amount Due’, which is explained below.

    Minimum Amount Due

    As the name suggests, the minimum amount due is the lowest amount possible that you have to pay to keep receiving credit from the bank. The minimum amount due is usually calculated on the basis of the below formula:

    Minimum payment= interest + 1% of total balance due

    Paying only the minimum amount due on a credit card is to be avoided as the balance amount will attract interest charges and be added to your next bill, which would make the amount payable at that point very steep. Thus, the cycle of making minimum payments would continue and you would be charged interest on a large sum of money.

    In a worst case scenario, you could be paying off credit card debt for years, with your interest rate only increasing, sinking a major portion of your income into card payments.

    Paying less than the minimum amount due is considered a missed payment, which is explained in detail below.

    What Happens If I Miss a Payment

    Missing a credit card payment will result in unpleasant consequences for the amount you will have to pay. Most banks and credit companies levy late payment charges based on the amount of time taken to clear the pending bill.

    The later the bill is cleared, the higher the charges and penalties associated with it. It is preferable to pay off a bill as soon as you receive it to prevent you forgetting to pay it, as this could end up being a costly mistake.

    Having overdue credit card bills will also have a negative impact on your credit score, making lenders wary of extending credit to you.

    How Your Bill Payments Are Applied

    If you pay any amount that is lower than your total amount due, the bill amount is distributed among the payments that need to be cleared first in your bill.

    If you have any outstanding amounts from your previous bill, the money you have paid will be put towards clearing that debt first.

    Any payments that have a higher interest rate or have fees associated with them will be cleared first as well. For example, if you have made a cash advance or a balance transfer, these transactions will be cleared first.

    If you pay off your bill in its entirety, your bank will just clear all dues instead of picking and choosing how to spread out your money towards paying the amount you owe.

    This will also prevent you from accruing interest on the money you owe and having to pay a higher amount the next bill cycle.

    Understanding your credit card bill its various components will help you make an informed decision regarding your bill payment plan as well as help you understand how the bank charges you for purchases and transactions made on your card. This will, in turn, help you cut down on interest payments and avoid card debt.  

      

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    Credit Card Bill Reviews

    • IndusInd Bank Credit Card
      "Good"
      0.5 5.0/5 "Blown Away!"
      I received a card on time which was applied through an online with INDUSIND bank. It is a life time free credit card. The credit limit is given was okay because I was expecting more than that. So far no issue faced by using this card. Their service is good.
      Was this review helpful? 3
      , mumbai
      Reviewed on Oct 17, 2019
    • HDFC Bank
      HDFC Bank Credit Card
      "Need to enhance the credit limit"
      0.5 3.0/5 "Satisfactory"
      For the past 2 years I am using HDFC BANK credit card for more than 2 years with low credit limit of 21 thousands only for 2 years I am using this card yet they have not enhance it. It is a life time free credit card. EMI option is applicable and charges are nominal.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Oct 17, 2019
    • SBI Cards Credit Card
      "Need to enhance the credit limit"
      0.5 3.0/5 "Satisfactory"
      I have been holding SBI credit card for more than 3 years. It is an annual fee chargeable of 2000 rupees and there is no option for a waiver off. The credit limit is sufficient for 50 thousands only. EMI option is applicable for this card and it is nominal.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
    • ICICI Bank Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have ICICI Bank credit card which was taken through Bank directly .I am using this credit card for the past 2.5 years ,The credit limit was very less and there was no difficulties faced so far ,I have got the credit card on time without any hassle and this card is really good to use .
      Was this review helpful? 1
      , hyderabad
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      The reason for taking Indusind Bank Ltd credit card because of the higher credit limit. I have used the card and made a payment as well without any difficulty. The credit limit is more than sufficient. They did not inform me about the reward points. The documentation process is easy.
      Was this review helpful? 0
      , chennai
      Reviewed on Oct 17, 2019
    • RBL Bank Credit Card
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      I am holding RATNAKAR BANK credit card for more than 2 years. It is an annual fee chargeable card of 1000 rupees and there is an option for a waiver off for a certain amount of usage. EMI option is applicable and charges are nominal. I use this card for many purposes.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have Indusind Bank credit card which was taken through Online .I have got the credit card on delay basis it took 1month time that was the difficulty faced by me .The credit limit was good and this was a free card .I am really satisfied with the service so far .There was no cash back offers and reward points .
      Was this review helpful? 1
      , hyderabad
      Reviewed on Oct 17, 2019
    • Citibank Credit Card
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      I have Citi Bank credit card for the past 1 year .I am using this credit card for the past 1year .I have got all the required details about the card process ,I have got this credit card on time without any hassle .The credit limit was pretty good and there was no drawbacks faced .I am satisfied with the service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2019
    • RBL Bank Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have Ratnakar Bank credit card which was taken through Bank .I am using this credit card for the past 1 year and it was a chargeable card ,I have got my credit card on time without any delay .The credit limit was really good and there was no drawbacks faced .I am realy satisfied with the service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2019
    • SBI Cards Credit Card
      "Good Service"
      0.5 4.0/5 "Great!"
      I have State Bank OF India credit card which was taken through Bank direclty.I am using this credit card for the past 6 years .I have got good credit limit and there was no difficulties faced while using tis card .It is very easy to use and very comfortable as well .I am satisfied with this credit card so far.
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 17, 2019
    • HDFC Bank Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have HDFC Bank credit card which was taken through Bank.I am using this credit card for the past 6 years .I have got all the required details about the card process ,I have got my credit card on time without any details .The credit limit was really good and there was no drawbacks faced .I am totally satisfied with the service .
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Good Service"
      0.5 4.0/5 "Great!"
      I am using Indusind Bank credit card which was taken through Online .The credit limit was very good it was upto 1 lakh it was sufficient .I have got all the required details about the card process.I have not faced so far on using this card .This was a free card .I am totally satisfied with the service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2019
    • Kotak Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have Kotak Mahindra Bank credit card which was taken through Bank .I am using this credit card for the past 4 years ,This card is very easy to use and there was no difficulties faced so far .I am really satisfied with the service .I am comfortable with the service so far.
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 17, 2019
    • RBL Bank Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have Ratnakar Bank credit card which was taken through Bank directly. I am using this credit card for the past 1 year and got all the required information about the card process very clearly . This was a chargeable card and the credit limit was really good and it was 1,52,000. I am completely satisfied with the service.
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Need to enhance the credit limit"
      0.5 5.0/5 "Blown Away!"
      I received a card on time which was applied through an online with INDUSIND bank. It is a life time free credit card. The credit limit is given for 75 thousands which was low because I was expecting more than a one lakh. EMI option is applicable. I have been using this card for shopping, fuel and restaurant purpose.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
    • SBI Cards Credit Card
      "Very Nice to use"
      0.5 3.0/5 "Satisfactory"
      In SBI, they are providing a voucher if i pay the annual fee of Rs. 3000 and if i use more than Rs. 5000 yearly, the annual fee is getting waived off. In SBI, i have a prime card. They gave me a credit limit of Rs. 50000. Customer care service is good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Very Good to use"
      0.5 5.0/5 "Blown Away!"
      They have given me a nice offers and the rewards points will be nice when I'm getting in a shopping. I have got the credit limit of Rs. 1 lakhs. There is a annual fee of Rs. 3000 but i can pay this by using the rewards points. I have got the first month bill and i have to pay on 24th of this month. The statement is clear to understand.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
    • ICICI Bank Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have ICICI Bank credit card which was taken through Bank directly.I am using this credit card for the past 4 years and got all the required information about the card process very clearly .This was a free card and and there was no difficulties faced so far on using this card .
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 17, 2019
    • SBI Cards Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have State Bank Of India credit card which was taken through Bank.I am using this credit card for the past 4 years.This was a free card and there are good reward points as well as cash back offers .I have submitted the required documents very clearly .There are good reward points as well as cash back offers .I am satisfied with the service so far.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 17, 2019
    • IndusInd Bank Credit Card
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have applied for a credit card with INDUSIND bank on two months before which was processed through an online. Within 2 days I received a call from their end once verification completed by 15 days I received a card. The credit limit is low as per my requirement. EMI option not aware. There was some requirement so I have chosen to apply for it.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
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