7 Smart Ways To Pay Credit Card Bills In 2022

You made a lot of purchases through credit cards during the festive season. Now it’s time to pay the bill. Know here 6 smart ways.

In the past, we celebrated Diwali, which is considered an auspicious time for big purchases like gadgets, appliances and cars. 

Additionally, there are discounts and other attractive offers on credit cards during the festive season that motivate users to spend. This may increase the usage of the card. 

Increasing your card spending limit also increases your debt, which can be difficult to pay off. Hence, it is important that post the festive season, you are in a position to keep your credit card balances under control and not let them become a huge debt. 

In this article, we are discussing some smart ways to pay off your credit card bill after the festive season.

Pay as per your billing cycle

If you have an outstanding balance on multiple credit cards, prioritize paying off the dues on cards that have close due dates. For example, the statement of your various credit cards is generated every month on 8th, 18th and 28th respectively. 

If you have spent money during the first week of the month, you should prioritize payment of card bills in the order of their statement dates i.e. 8th, 18th and 28th. 

However, if you have used the card on the 20th of the month, then you should give priority to the payment of those bills whose statement date falls first i.e.

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28th of the current month and 8th and 18th of the following month. Knowing the billing cycle will give you the maximum period of interest-free credit as well as the maximum time to pay off your dues.

Pay the card with the lowest bill first

Here’s another way to prioritize your dues. If you have more than one credit card that has outstanding bills, you can pay the card with the lowest bill first and then proceed to pay the other bills. 

Paying the lowest credit card bill will result in a marginal improvement in your credit score as well as the credit utilization ratio. 

You have very little time to lose if you want to avoid incurring huge interest charges on your outstanding balance.

Convert large bills into EMIs

You can request your credit card company to convert your outstanding amount into EMI. 

Most credit card companies give you this facility. 

This helps reduce the chances of late payments and penalty charges, and keeps your credit score from going down. 

Before EMI conversion, know the interest rate charged and compare it with your other cards.

Consider balance transfer

You may also consider consolidating all your debts into one through the balance transfer process, which allows you to transfer your outstanding balance from one or more cards to one card. 

If you choose this option, you will get short-term relief from your debt worries as you will get a credit-free period of up to 90 days from the new card issuer. 

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This way you will get some extra time from the issuer to arrange loan repayment. Note: After the credit period ends, your issuing company will charge regular interest.

Avoid further use of the card till the outstanding balance is not paid

When you have already spent more than your budget, it becomes necessary to adjust the new expenses to manage the cash crunch. 

You should avoid spending on your credit card until you have paid your dues. It will also help you to stick to your regular essentials and avoid unnecessary expenses.

You should pay the Minimum Amount Due (MAD)

If you are unable to pay your due amount on the due date, you should pay the minimum amount due. This is usually 5% of your outstanding balance for that month, subject to the lower limit. 

Even if the MAD is not paid, you may be penalized for late payment. Non-payment hurts your creditworthiness and credit score. Keep in mind that MAD only protects you from penalty and not the interest on the outstanding amount.

There are many disadvantages of not paying the credit card bill on time. During the festive period, if you have spent more than your limit then you should immediately make an action plan to pay your bills on time so that you can get rid of debt worries without affecting your budget.

(Disclaimer: This article is for informational purposes only. It should not be construed as investment, financial or other advice)

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