Credit cards have become an integral part of our lives. From making cashless restaurant bill payments to buying a luxury item on credit, the benefits of owning a card are many. But with the rising popularity of credit cards, there is also a significant percentage of the population that fails to remember their credit card due date.
In a world where everyone is constantly hustling and running around, it is not an uncommon phenomenon and ends up affecting a lot of people. The card due date is usually 21 to 25 days after the credit card billing cycle ends. Since there is a gap of a little more than three weeks, most people don’t have the dates in mind anymore.
Although one can keep availing of card services by paying the minimum amount due, there are numerous disadvantages of not paying the total outstanding amount. Additionally, if you pay the entire amount, you not only avoid facing the repercussions in the form of higher interest rates and late payment fees, but you can also gain from it. Here are 6 ways you can gain from remembering your card due date, and by paying the bill on time.
Have a good credit score
If you own a Credit card, buy something on EMI, or avail of a loan, you inevitably have a credit score. It is a number that is allocated to one on the basis of their repayment patterns, credit utilization ratio, and their credit history. The higher your credit score, the better is your potential as a borrower. Therefore, paying your card bills on the due date or before portrays you as a responsible borrower. This will heavily influence your credit score and help you amp it up. With a higher credit score, you will be eligible for credit cards and loans in the future.
Avoid paying high interest rates
After your billing cycle ends, there is a gap of around 24 days, within which time the card bill has to be paid. If you don’t pay the total outstanding amount, you will have to pay at the very least a minimum amount to continue using your credit card. However, if you pay only the minimum amount due, the balance amount gets carried to the following month, and higher interest is charged on this amount. Thus, the amount keeps piling up as you keep paying only the minimum amount due every month.
No late fees
Banks and credit card companies also charge late fees every time you extend your credit card bill repayment date. The late fees can sometimes add up to a significant amount, and place you in a debt trap.
Have more credit limit available
If you don’t pay the outstanding billing amount at the end of the billing cycle, you don’t get access to your entire credit limit. For instance, if the credit limit on your credit card is Rs. 1 lakh and your credit card bill is Rs. 50,000, then your remaining credit is only Rs. 50,000. Until you pay the remaining amount, your credit will be limited to Rs. 50,000 itself. This can sometimes be frustrating because it will limit your ability to make purchases.
Increase your credit limit
One of the primary aspects that banks look at is how punctual a customer is with their credit card bills. This not only tells them how serious the person is, but is also an indication of their financial status. If you remember to pay your credit card bills on time, banks might consider increasing your credit card limit. Furthermore, timely repayment also ensures that you’re financially stable to handle more credit.
Do not be bothered by the bank
If you put off paying your credit card bill, a representative from the bank or credit card company will call you multiple times. If you do not pay it for long, they might even visit your residence. To avoid such situations, make sure to mark your due date on the calendar and pay the bill on time.
It goes without saying that paying your credit card bill on time can be helpful. Not just to save money that could go towards late fees and interest rates, but also to have a better credit profile. So from now on, set a reminder for the end of your credit card billing cycle and due date. Make sure to never miss a payment, and you can enjoy all the perks extended by credit cards.