Tens of millions of people in India now use credit cards as part of their daily lifestyle, from buying groceries to paying utility bills. Credit cards not only give you that ‘cash-at-hand’ advantage, but let you spend on flagship products and services without touching your savings.
Additionally, credit cards let you pay for emergencies without the worry of affordability. Although you have an interest-free line of credit that may range anywhere from 30 to 50 days, the fact remains that you have to pay the bill at the end of your billing cycle.
You will get a statement or bill with the total amount required to be paid. If you know about certain terms, such as the credit card bill generation date, you stand to use your card wisely.
Know the Terms
Out of some 60 million credit card users in India, the majority admit to being unaware of certain aspects of these cards. One rule of thumb while using a credit card is to always pay bills on time.
If you don’t, you end up falling into debt, with your due amounts simply rolling over to the next billing cycle. Accumulating amounts to be paid just increases debt and lowers your creditworthiness. You should know that a billing cycle is a duration between the closing date of your last statement and the next.
At the end of it, a bill is generated and you must pay the amount stipulated on it. This is the amount you have spent using your card. Every credit card statement or bill will show an amount that falls under ‘minimum amount due. The minimum amount on a credit card is the smallest amount that you have to pay each cycle to keep your credit card account active.
Credit cards offered by banks and financial institutions like the Bajaj Finserv RBL Bank Supercard permit you to customize your billing cycle and the bill generation date, to meet your individual payment requirements.
Facts About Bill Generation Date
In order to use your credit card judicially to pay bills on time, you should know about your precise billing cycle and the bill generation date. Here are five facts to consider:
- Every month, your credit card issuer — the bank or finance company, sends the credit cardholder a bill or a statement based on transactions done during the billing cycle.
- The date on which your credit card statement or bill is generated every month is called the credit card bill generation date.
- Typically, the bill generation date is the last day of the billing cycle of each month. For instance, your billing cycle may start on the 5th of each month, continuing till the 6th of the subsequent month.
- Whatever transactions you have undertaken during the period of the billing cycle will show in your statement, getting added to your bill, whether they are purchases made, ATM cash withdrawals, processing fees etc.
- When you receive your credit card bill or statement, you will see the total amount due to be paid by a given due date. You must make this complete payment by the due date mentioned. From the date that your bill is generated to your due date, you will have sufficient time to make your payment. In case you fail to make the payment, your balance amount due will carry over to the next billing cycle, increasing the amount you owe. Furthermore, you will have to pay heavy interest and penalties as you have failed to make timely payments. People make the error of paying only the minimum amount due in a credit card with a view that they won’t be liable for any penalties. You should note that this is only a part of the payment you owe (usually 5% of your total due), and the balance will have to be paid with added interest.
Smart Credit Card Use
You can easily avoid penalties and interest by knowing exactly how your billing cycle works, and the date of your bill generation. You can plan your spending in a way that allows you to meet bill payments on time. An excellent credit card to have is the Bajaj Finserv RBL Bank SuperCard which permits multiple uses. The card can act as an EMI card and a cash withdrawal card. Moreover, it’s a digital tool that has facilities to remind you about bill generation dates and due dates via the RBL MyCard app.