If you own a credit card, you might be aware that one of the most important things to take care of is the credit card bill payment. Users who are dependent on credit cards for almost everything nowadays need to understand that, firstly, unnecessary spending is not a wise option, and secondly, reviewing your expenses via this card is also very important.
Since credit cards came into existence, the purchasing power of individuals has definitely increased. It is well-known that once you receive the 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 cycle. Trust me, if you go with this flow, you will avoid paying off ever-increasing amounts due to various fees added to your bill during each cycle.
What is a credit card?
It is a payment card that allows an individual to borrow money from a bank/financial institution to pay bills or make any purchases. When you avail a credit card, you are basically borrowing money from the credit card issuer. In return, you are required to repay the borrowed amount along with any applicable fees and interest charges.
These cards generally have a credit limit, which is the maximum amount one can borrow using the card. Either you can use it to make certain purchases at merchants who accept the card, or you can also use it to withdraw cash from banks or ATMs.
What is a credit card bill?
As the term suggests, it is a statement that shows the amount the borrower owes to the credit card issuer. This is usually for purchases, cash advances, and other charges made using the card during the billing cycle.
Credit Card Bill Payment includes basic information such as the billing period, the due date of payment, minimum payment due, interest charges etc. Once the borrower receives the bill, he needs to review it carefully in order to ensure that all charges are accurate.
What are the top 3 Mistakes to Avoid When Paying Your Credit Card Bill?
Paying Minimum Balance
Paying only the minimum balance on your credit card bill might seem easy to avoid a late fee, but remember, it can be a costly mistake. This is because one ends up paying more interest charges over time. Therefore, always try to pay your full balance or at least as much as you can afford.
Payments not made on time often lead to hefty fines and negatively impact your credit score. Nowadays, one can easily set up automatic payments or even reminders to ensure the bill is paid on time every month.
Not reviewing the statement properly
Once you receive the statement, ensure that you read it carefully. Failing to review it properly can result in mistakes or even fraudulent charges. So, if you use one before initiating the credit card bill payment online, make it a habit to check statements regularly.