Official data from September 2019 suggests around 10.8 million credit cards were added in India within the span of a single year. It further added that more than 52 million credit cards were active in India, suggesting an increasing rise in the popularity of this financial tool. With various individuals adding to this number, a rise in new users also begs for a few pointers.
Among various issues, new users should begin with understanding credit card interest rates and how to avoid them. There are various reasons which lead to financial institutions implementing interest on credit cards, the foremost among them being late repayment. Irrespective of whether an individual is a new user or an old one, following pointers can go a long way in reducing interest payment on credit card bills, in turn also reducing a user’s financial burden.
Clear bill in due time
Users of credit cards should make sure to clear their bills before the due date to avoid interests. Typically, financial institutions offer a few additional days after their billing date. When an individual fails to clear his/her bill by this given date, additional interest is levied.
Pay the minimum amount due
In case an individual is unable to clear his/her total billing amount, they should at least pay their minimum amount by the due date. Under such circumstances, this remainder of a bill is added to that of the next month without any credit card interest rates being charged on them.
Use the card for necessities
It is advisable to plan credit card used only for necessary items, rather than using it for every purchase. This avoids the chance of compounding a high billing amount which might turn out difficult to pay. Especially for spendthrift individuals, this is a vital pointer since accumulating credit can be detrimental to their finances.
Individuals who find it difficult to clear their credit bills can also consider transferring their balance to another credit card. This can be done easily by clearing a credit bill with another card, which charges zero or low interest. Users should also learn of different methods on how to repay their credit debt, in case such a situation arises.
Increase credit limit
Another viable option for card users to reduce the burden of credit card interest rates is that of increasing their existing limit. Different financial institutions have their specific eligibility criteria for a limit increase, and users should check them beforehand. Increasing the credit limit allows users to spend more without adding interest in crossing their credit limits.
For high-value purchases, Bajaj Finserv RBL Bank SuperCard and its likes also offer the option for EMI conversion. This can be very helpful for users since it allows them to break their purchase into multiple EMIs and repay them slowly over months without any additional interest payment.
With an understanding of these above pointers on credit card interest rates and their application, potential users can immensely reduce their financial burden. It is best for interested individuals to note these tips even before they apply for a card since their application process is far simpler.
Furthermore, individuals interested in online credit cards should also choose their convenient payment option amongst the various choices which are offered by different financial institutions for bill payment. A convenient option in this regard is that of linking the financial account of a user, which ensures direct bill clearance before its due date. Additionally, one must also know a few things about credit card bill payment like the available options and the ideal time to pay.