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  • Reasons Why You Should Avoid Late Credit Card Payments

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  • Like every other line of credit/loan, credit card also has its fair share of pros and cons. On the one hand, it gives an individual the freedom to purchase without worrying about bank balance. However, failure to make timely payments of credit card dues can lead a person into a downward spiral of impending debt.

    There can be situations where the idea to delay credit card payment might seem well-suited, especially if there is a financial crisis. However, missing credit payments can bring, in addition to late payment penalties, ramifications severe enough to leave a long-lasting effect on the financial status. Given below are reasons why you should make every effort to avoid late credit card payments.

    • Late Payment Penalty
    • One of the reasons why no one should avoid late credit card payments is the stiff late fees charged by the banks and credit card companies. As per the RBI rules, the late fee is charged when a credit cardholder fails to clear off dues even after three days past the due date. The late fee is then added to the next cycle’s bill and can cost the cardholder a pretty penny.

    • Higher interest rate
    • If the payment for a credit card is due for more than 60 days, a penalty interest rate is usually levied by the credit card companies. Many credit card companies set this penalty rate as high as 30% to be charged on the outstanding bill amount. The increased interest is also charged on any new purchases or cash withdrawals – even after the credit card bill has been paid on time for six consecutive months.

    • Interest-Free period
    • If a customer pays just the minimum due or misses a payment, the outstanding balance gets carried forward. Once the rollover facility is used, the interest-free period lapses. Interest will be charged on the outstanding balance as well as subsequent purchases. The interest-free period is reinstated only once the entire bill is cleared in full.

    • Debt collection hassles
    • Credit card companies will leave no stone unturned to collect the dues once an account goes in collections for several months. They might also demand additional charges which, unfortunately, are not illegal.

      Not only credit card companies will repeatedly pursue the defaulter, but if a customer fails to pay despite companies’ constraints, the collection agency can mark the credit account on the credit report as a defaulting one.

    • Bad credit score
    • Every bank and financial institutions checks the credit score of an individual asking for a loan or applying for a credit card. The credit score determines a person’s worthiness as a borrower, i.e., someone who regularly clears monthly dues.

      A credit score calculation depends no less than 35% on whether the credit dues are paid on time. A consistent credit bill payment habit, along with the practice of paying off other dues, significantly boosts the credit score. Hence, if the payment history is not stable, it will directly affect the credit score since banks include these defaults in the credit information. As a result, chances of loan or credit card application getting rejected are always higher and so is the likelihood of getting a loan at an increased interest rate.

    • Deactivation of credit card
    • Even if the card is closed, you are still liable to pay the outstanding with interest. It's better to look at options of EMI or a personal loan to clear it off and pay a fixed rate of interest. Leaving the payment pending could result in the interest building up to more than the principal.

     

    How To Avoid Credit Card Late Payment

    Credit card late fees can, however, be avoided if one follows the ways mentioned below.

    1. Sign up for auto-pay
    2. Most banks offer auto-debit facility which automatically deducts money from the cardholder’s account on a specific date. Credit cardholders can sign up for this autopay facility which will reduce the chance of missing a payment due date. The only thing that one has to make sure is to keep sufficient funds in the bank account for the auto-debit to happen. This can be done by keeping a tab on the account balance on a regular basis.

    3. Set up reminders
    4. One more way to avoid missing credit due date is to set calendar reminders and online alerts for at least four to five days before the due date. These alerts and reminders will notify the cardholders promptly and help them avoid late payment and all the hassles associated with it.

    5. Make the payment in advance
    6. Depending on the method of payment, its important to consider the processing time. Cheques may take 2-5 working days, while online payments may take a few hours up to a day for the payment to be processed. If one is paying cash at the bank branch, a fee is usually charged for this service, but the payment will reflect faster. Different payment modes have different processing times for the payment to reflect in the credit card account. Therefore, it’s important to make the payment in advance to avoid missing the due date.

    7. Call the credit card company
    8. If however the credit cardholder still misses the due date, he/she should immediately call the card issuing company and work out some solution to avoid late payment penalties. If it is the first time that the person has missed a payment due date, he/she can opt for any of the aforementioned ways to ensure there would be no repeating of it in the future.

    9. Pay at least the minimum amount due
    10. It’s important to pay at least the minimum due by the payment due date. This will ensure that no late payment fees are charged. The customer can also avoid being charged a higher interest rate.

      

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    Reasons Why You Should Avoid Late Credit Card Payments Reviews

    • Axis Bank Credit Card
      "Service is not up to the mark"
      0.5 1.0/5 "Really Bad"
      I am holding credit card from Axis Bank. I received the card on time. Credit limit is very less. I am not satisfied with their customer service. I lost my credit card. I informed them many times about it but they have not issued a credit card yet. When I call their customer care they ask me to go to branch and when I go to their branch they ask me to call customer care.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jul 16, 2019
    • IndusInd Bank
      Bank Bazaar Credit Card
      "User friendly"
      0.5 4.0/5 "Great!"
      While surfing a credit score in a website I came to know about Bank Bazaar for the first time then I preferred to apply for a credit card and the process was good. Customer service is a nominal and okay. I use to check credit score through a website.
      Was this review helpful? 0
      , thane
      Reviewed on Jul 16, 2019
    • IndusInd Bank Credit Card
      "Good "
      0.5 4.0/5 "Great!"
      I am using INDUSIND bank credit card for more than a month which was applied through an online. On time I received a card from bank. The credit limit is okay which was given from bank. Not yet use the card. The customer service is good and responsiveness.
      Was this review helpful? 0
      , thane
      Reviewed on Jul 16, 2019
    • Bank Bazaar Credit Card
      "Average"
      0.5 4.0/5 "Great!"
      I have come to know about Bankbazaar from the internet. Their customer service is good and very helpful throughout the process. I have been using Bankbazaar for the last 4 months. I check free credit score and mobile application is user friendly.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jul 16, 2019
    • Citibank Credit Card
      "Average"
      0.5 3.0/5 "Satisfactory"
      I am using my new INDIANOIL CITI PLATINUM CARD. I was delivered on time. Citi bank has given very less credit limit. I am expecting 1 lakh and above. It is a lifetime free card. I am having a hard time to pay my bills and it takes 2 days to reflect my payment.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jul 16, 2019
    • HDFC Bank Credit Card
      "Good service"
      0.5 4.0/5 "Great!"
      I am holding an HDFC credit card. I have been using this credit card almost 10 years. I had received the card on time and credit limit is nominal. Sometimes I am getting some benefits like cashback offer and reward points. HDFC bank customer service is great.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 16, 2019
    • Axis Bank Credit Card
      "Average"
      0.5 2.0/5 "Expected more"
      I am holding a credit card from Axis Bank. I received the card on time. It is a lifetime free card. I have been using this credit card for the last 2 years. Axis bank Netbanking and mobile banking are user friendly. They have given me enough credit limit.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 16, 2019
    • IndusInd Bank Credit Card
      "Need to imrprove customer service"
      0.5 4.0/5 "Great!"
      I am using INDUSIND bank credit card for more than 3 months which was applied directly to bank. On time I received a card from bank. It is a life time free credit card.The credit limit is nominal . I use this card for all purposes. The customer service is no proper response.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 16, 2019
    • Bank Bazaar Credit Card
      "Hassle free"
      0.5 4.0/5 "Great!"
      I have used the services of Bankbazaar earlier as well. The customer support is good and they are quick to respond. The process is also satisfactory as it was easy to use the portal and place a request. There were follow up calls as well. In all no hassles.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jul 16, 2019
    • Bank Bazaar Credit Card
      "Good"
      0.5 3.0/5 "Satisfactory"
      I have come to know about Bankbazaar from a promotional message. I have been using their service more than 5 years. I visit this website to check financial products and credit score. Their customer service is good. Website and mobile application is quite user friendly.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 16, 2019
    • IndusInd Bank Credit Card
      "Unhappy with the process"
      0.5 3.0/5 "Satisfactory"
      I had applied for a credit card with Indusind Bank. The process has not been satisfactory. The credit card was sent to my old address and I did not even receive a call as well. Since I was no available at that address it returned to the bank and after which I got no card from them.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jul 16, 2019
    • HDFC Bank Credit Card
      "Good"
      0.5 4.0/5 "Great!"
      I am holding HDFC bank titanium credit card for more than 9 months which was applied directly to bank. On time I received a card from bank. It is an annual fee chargeable card.The credit limit is nominal and enhanced it. I use this card for all purposes but I get less reward point.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 16, 2019
    • IndusInd Bank Credit Card
      "Average"
      0.5 3.0/5 "Satisfactory"
      I have received my Indusind Bank PLATINUM AURA EDGE MASTER CARD. I am not able to pay my credit card bill through netbanking. The process seems very difficult to me.It is a lifetime free card and credit limit is nominal. They deliver the card on time.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 16, 2019
    • RBL Bank Credit Card
      "Need to decrease charges"
      0.5 2.0/5 "Expected more"
      I am holding RATNAKAR bank credit card for less than 2 years. It is an annual fee chargeable. The limit is okay now they have increased to 7 thousands only. I use this card electricity, ticket booking, restaurants, to buy electronic items based on the usage I get more points. They are taking some hidden charges without any intimation.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 16, 2019
    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been holding SBI credit card from long time, their service is good, they have charged me annual fee but waived off option is available, i am happy with the credit limit they have given me good limit as per my requirement, even the interest rate they have charged me is less comparing to market price.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 16, 2019
    • YES Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using YES bank credit card for long time my experience till now with this bank was good, they provide me good offers in all products, and they have not charged me annual fee in this card, it is life time free credit card, and i am happy with the credit limit which they have given me in this card.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 16, 2019
    • Standard Chartered Bank Credit Card
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      I have been holding standard chartered bank from long time, but i am not satisfied with their service , their service is not up to the mark, they have charged me annual fee but no waived off option is available in this card, i hold this account two years before, but they have not increase my credit limit, their customer care service is not up to the mark.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 16, 2019
    • ICICI Bank Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using ICICI bank credit card for a while, and they have not charged any annual fee in this card , it is life time free card and i am okay with my credit limit which they have given me in this card and like they charge annual fee but most of time it use to get waived off so i considered as no annual fee they charge and they provide good offers and discount in this card.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 16, 2019
    • Bank Bazaar Credit Card
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I came to know about Bank bazaar through Online only ,This portal was well known to all ,I have tried checking credit score it is very useful ,This portal is very useful to search all the required information related to all financial products . I am satisfied with the service .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 16, 2019
    • HDFC Bank Credit Card
      "Good card"
      0.5 4.0/5 "Great!"
      I have been using HDFC credit card for long time, they have not charged me annual fee in this card, it is life time free credit card and i am happy with the credit limit they have given me in this card, and there is not much offers they have given in maximum products, they mostly given offers on miles that more important for me , overall service is good.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 16, 2019
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