All You Need to Know about Credit Card Payments

Updated on: 14 Dec 2021 // 25 min read // Credit Cards
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Credit Cards have been the pioneers of the concept of “Plastic Money” and are now leading the charge in the department of “Digital Payments”. With the Government of India encouraging people to go for cashless transactions as well as the rapid growth of the e-commerce sector, Credit Cards have become more popular than ever. After having understood the benefits of cashless transactions, people are now eager to get hold of acard in addition to the debit card. Ease of making payments online is only one of the many benefits offered by Credit Cards. There are numerous other benefits that you can avail with the usage of Credit Cards such as:

  • Attractive cashbacks on the purchase of certain products online
  • Discounts on particular transactions
  • Pay bills and make purchases even if there is no money in your bank account
  • Interest-free EMIs (Equated Monthly Instalments) on consumer durables
  • Free travel insurance, personal insurance, and accidental insurance.
  • An interest-free period of up to 60 days
  • Complimentary lounge access at major Airports
  • Ability to make forex transactions and many more

With the rapid integration of technology in the finance sector, you can now find out information and Apply for the Best Credit Cards Online with the help of various online finance marketplaces as well as the particular website of the individual card issuer. You just need to provide some basic information along with the application form,and if your profile meets their requirements, your new Credit card will reach you within a few days.

However, usage of even the best Credit Cards, like SBI Credit Card or others requires strict financial discipline otherwise it is inevitable that you will rack up a massive Credit Card debt. The rate of interest on such debts adds up to 42%,and if you do not make the entire repayment by the end of the interest-free period, you need to pay interest from the first day itself. Additionally, the availability of easy credit leads to impulse purchases which further place you under a mountain of debt. So, you must make it a point to use your Credit Card judiciously, only then can you maximise the benefits available to you.

Best Offers on Credit Cards online

Credit Card Bill Payment

Credit Cards work on the principle of revolving credit and are a kind of instant Personal Loan. Every card comes with a pre-determined limit, which is the maximum amount you can use until you make the payment towards the bill. Your available limit reduces every time you make a transaction from your card,and it is reinstated as and when you make the repayment. All Credit Cards come with an interest-free period of up to 60 days, if you repay your entire amount due before completion of the said period, your interest liability is waived off. Otherwise, you need to pay interest on the first day of purchase itself.

Following are the most critical factors that you must pay attention to while taking care of your Credit Card Bill Payment liabilities:

1. Payment Due Date and Bill Generation

Credit Card bills are generated every month and all the charges incurred in the previous month are included. You usually get approximately three weeks to make the payment of the bill amount. Therefore you get around 50-60 days of the interest-free period. If you repay the entire amount before the due date, you need not pay any interest for the said interest-free period. If you can manage your purchases smartly,i.e., make big purchases towards the beginning of the billing period, then you get maximum interest free period for Credit Card bill payment. However, you need to remember that if you make any cash withdrawals against your card or do not make payment by completion of interest-free period, then your interest-free period benefits are discontinued.

2. How Can You Pay Your Credit Card Bills?

When it comes to your Credit Card bill payment, there are multiple channels that you can use, such as:

  • Cash payment at a bank branch (this invites cash payment surcharge)
  • Payment through cheque/demand draft/bankers cheque (at a bank branch or dropbox)
  • Online Payment through NEFT/RTGS/IMPS
  • Payment through Bill Desk or payment gateways
  • Fund Transfer from ATM
  • Mobile Banking through the bank’s app
  • Auto Debit from your bank account

3. How Much to Pay?

There are three options that you can choose from while deciding as to how much you must pay towards your bill:

  • Total amount due:

This is the total amount you have spent during the billing cycle. If you pay the entire amount due, you need not pay any interest.

  • Minimum amount due:

This is the minimum amount you must pay to avoid late payment charges. It is usually 5-10% of the entire amount due. This practice must only be used in case of a severe financial crisis as it increases your interest burden significantly.

  • Paying more than minimum amount but less than total amount due:

If you are not in a position to repay the entire amount due, you have the option to pay an amount which is more than the minimum due amount. This will help you get rid of your Credit Card debt faster as compared to minimum payment due.

4. Over-usage, Late Payment or Penal Charges

  • If you do not make payment by the due date, then you are liable to pay late payment charges which are significant under any circumstances.
  • If you made payment through cheque and the cheque bounced, then you will need to pay anexorbitant amount as late payment charges as well as cheque bounce charges.
  • If your Credit Card Usage exceeds the maximum limit on your card, you will need to pay over-limit charges.
  • If you withdraw cash against your card, then you must pay significant cash advance charges.

You must pay close attention to the Usage of your Credit Card and Repayment, as if any of the above charges are levied against your card, it would destroy your credit score. Therefore, you must practise great fiscal discipline while using your card.

Also Read: 5 Best Credit Card Types for Frequent Travelers


To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

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