Since credit reports and scores matter a lot when it comes to getting a loan, A three-day grace period gives you additional time to settle the bill before a late payment affects your creditworthiness.
If you want to use your credit card to buy electronics, durable items, or anything else before Diwali, don’t forget to pay your bills. It’s important for people who use credit cards to make sure they pay their bills on time to avoid fees or high-interest rates. If you don’t pay on time, it could also hurt your credit score.
Even if you know about these consequences, there are times when you can’t pay your credit card bill by the due date. This could be due to a lack of cash or an emergency.
Everything you need to know about paying your credit card bill
Reserve Bank of India (RBI) rules say that if you don’t pay your credit card bill by the due date, the credit card company can report your account as “past due” to credit information companies (CICs). If the amount isn’t paid more than three days after it’s due, it’s reported.
With a three-day grace period, you will have more time to pay the bill before a late payment hurts your creditworthiness. This is because credit reports and scores play a big role in getting loans.
The issuer can also charge a late payment fee or a penalty charge.
From the payment due date on the credit card statement, the issuer needs to figure out how many “days past due” there are and how much the late fee is.
Aside from that, penalties for interest or late payments are only added to the amount the credit card holder hasn’t paid yet, not to the whole amount. It’s also important to know that the credit card company can only change these fees after giving the cardholders at least a month’s notice.
You can also give up your credit card after you’ve paid all your bills. When this happens, the credit card company can’t charge you extra to close the account.
RBI rules say that when you ask to close an account, the issuer must handle your request within seven business days.
If the issuer doesn’t finish the process of closing the account within the given time, it has to pay you Rs 500 per day as a penalty until the account is closed.