All You Need to Know About Credit Card Bill Payment

Credit Card is one of the most important financial tools that helps in carrying out your daily transactions like paying utility bills, mobile bills, buying groceries and more. One of the important things to remember while using credit cards is to pay the outstanding dues on time. If in case you forget to pay the bill on time, you will have to pay the late payment fee along with the associated interest. Even a single missed payment can have a negative impact on your credit score

Here we will discuss the most important aspects of paying credit card bills. But before that let us delve deeper to find out how a credit card payment cycle works.

Suggested: What happens when you default on credit cards?

How payment due date and interest-free period work?

Credit card bills are cyclical so a new bill gets generated every month and it reflects all the purchases made since the last bill was generated. The payment due date is set 21-25 days after the date of bill generation and in this way, you can enjoy an ‘interest-free period’ of about 45-50 days.

Let us understand this with the help of an example.

Suppose your SBI credit card bill payment is due on 25^th August and your bill was generated on 4^th August. This means your previous bill was generated on 4^th July; any purchases or payments that you made on the credit card after this date will be included in the next bill and the payment will be due on 25^th August. So, the period from 4^th July to 25^th August is your interest-free period as you are required to pay the entire outstanding amount on 25^th August.

Now, let’s say you purchased an appliance on 6^th July. The interest-free period on this item will be of complete 50 days. You made another purchase on 30^th July and on this you will enjoy an interest-free period of 26 days only.

How to utilize your interest-free period smartly?

To make the most of your interest-free period, you should make high-value purchases at the beginning of a credit card billing cycle. This way you will get at least 45-50 days interest-free period so that there is a long gap between the day you make the purchase and the day you have to pay the bill.

Interest-free period can make your credit card a zero-cost loan if you make smart use of it. However, an important thing to note here is that this interest-free benefit will not be applicable under two scenarios-

• If you have not paid the entire outstanding amount in the previous month’s bill.
• If you withdraw money using your credit card (cash advance).

Also Read: How To Manage Interest-Free Period In Credit Cards?

How to Pay Your Credit Card Bills?

As soon as your credit card statement is generated, the bank sends a message with the outstanding balance and the payment due date. Paying your credit card bill is imperative to keep your spending under control. You can easily pay your credit card bill both online as well as offline. You can opt for any of the following options for bill payment.

Methods to pay your credit card bill
Online	Offline
Internet Banking	Customer Care
NEFT / RTGS	ATM
BillDesk	Over-the-counter payment
Debit Facility	Cheque
Mobile Wallets & Payment Systems	Demand Draft

Credit Card Bill Payment Online

1. Via Internet Banking

If you already have a savings account with your credit card issuer, you simply need to register your card in your existing net banking account and directly make the payment. In case you don’t have a savings account you have the option of opening an internet banking account for your credit card and making the payment directly from that account.

2. Via NEFT / RTGS

 You can easily pay your credit card bill from any other bank account using the NEFT or RTGS facility. It is to be noted that the instructions may vary slightly from bank to bank but in the majority of cases you need to enter your credit card number and the payee account number to initiate the payment. Also via the RTGS payment service, you can make payments for Rs.2 lakh and more.

Note– The IFSC Code is unique for credit card payments. Make sure you get the right code before initiating the payment.

3. Via BillDesk

BillDesk is an online payment platform that enables you to facilitate credit card bill payments without having an online account. Many banks including SBI and HDFC provide the BillDesk payment platform for the ones not using the net banking facility. The BillDesk platform of each bank is unique and provides different payment options.

4. Via Auto Debit Facility 

You can register for the auto-debit facility if you have a net banking account for your savings account. The auto-debit facility enables you to provide standing instructions to your account holding bank to deduct the bill amount on the set date every month. While registering for the service you can either choose the minimum or the total amount due.

5. Using Mobile Wallets and Payment Systems

 There are many mobile payment platforms including Paytm, MobiKwik, PhonePe etc. that provide the credit card bill payment facility. It is to be noted that no separate registration is required to make payments by using any of these platforms. All you need to do is-

• Download the app from the Play Store or App Store
• Link your debit card or savings accounts
• Add money to your wallet
• Enter your credit card details and make the payment

Credit Card Bill Payment Offline

1. By calling Customer Care

 There are a few banks and credit card issuers that provide the facility of credit card bill payment by calling the respective customer care. However, to avail the service, you must have a savings or current account with the issuer bank. In the majority of cases, the IVR will guide you through the payment process and hence the card details remain confidential and secure. 

2. Via ATM

If you have a debit card from your credit card issuer, you can directly go to the bank’s ATM to pay your bill.

• Visit any nearest ATM of your issuer bank
• Insert your debit card into the ATM machine
• Select ‘Credit Card Bill Payment’ option
• Follow the further instructions to make the payment

3. By visiting the Bank Branch

 You can also visit your nearest bank branch to make your credit card payment by cash. You need to-

• Walk into the nearest bank branch
• Go to the bank’s executive and ask for the deposit slip
• Fill-in the slip with your credit card details and the bill amount
• Submit the duly filled slip at the counter

4. Drawing a Cheque

 You also have the option of drawing a cheque in favour of the credit card account and drop the same at any bank branch or ATM dropbox. The cheque should contain your name and contact details on the backside.

5. By Demand Draft

Another offline payment method is to draw a DD in favour of the credit card account and drop it at the nearest bank branch or ATM dropbox. The DD should also include your name and contact details on the backside.

How much to pay- minimum amount due, total outstanding or more?

Different people have different ways of paying their credit card dues. Some cardholders pay the entire outstanding amount as and when it is due while others can only manage to pay the minimum amount. Also, there are some who make several payments in a month in order to reduce the debt and at the same time maintain sufficient cash flow. But which of these is a good payment strategy? Let us discuss in some detail-

Paying the Minimum Amount Due- It is not advised to make the minimum payment every month because the rest of the outstanding amount gets rolled over to the next statement. Any amount that remains outstanding in your account incurs interest charges. Credit cards, being one of the most expensive forms of debt, can ruin your financial condition if you do not pay the total outstanding amount per month.

Paying the Total Outstanding Amount- This is the best practice. You should make the payment of the total amount due on or before the due date. This way the interest-free period will also be applied every month plus there would be no penalty or extra finance charges.

Paying More Than the Total Outstanding Amount- If you pay an amount higher than the total outstanding value, this will be shown in your statement as a negative balance. It is a form of extra credit added to your existing credit limit but it is not given by the bank. This method is helpful when you want to make a big purchase but you don’t have enough credit left. Say, you want to purchase an item worth Rs. 37,000 but your credit card has a limit of only Rs. 30,000. In this case, you can pay Rs. 7,000 extra and then purchase the item. However, this is not an advisable practice.

Also Read: Reasons why you should not Miss your Credit Card Payments

Credit Card Charges to be paid after Moratorium

The moratorium period on credit card payments by RBI ended on 31st August 2020. If you have had opted for the same and now have too much bill piled up, you can opt for loan on credit card or personal loan, as per your convenience, and try to pay off the debt as quickly as possible.

Also Read: Loan on Credit Card Vs Personal Loan

Bottom Line

Credit cards are simple for those who have basic financial knowledge but they can be complicated for a layman. Do not roll over your credit and pay the entire outstanding amount every month. Do not panic if you miss the payment by just 2-3 days because only the payments that are delayed by more than 30 days will have a negative impact on your credit score. At the end plan your credit card usage in a way that you get the maximum benefits out of it.