A financial crisis can arrive at any time. Having a credit card during those harsh times is a real blessing. This plastic money allows the customer to borrow money for various needs; the best thing is that it is not linked to the customer’s bank account. Therefore, every time the customer swipes, money is deducted from the credit card limit, not the bank account. Credit cards host different features and benefits compared to other payment methods. Credit cards are widely accepted, which omits the burden of carrying money for shopping and other needs. It is safer than other payment methods like debit cards because they are not linked to the bank account. SBI credit card bill payment service is an excellent way of online transactions, and it comes with exciting rewards and cash-back offers.
This financial tool carries a list of advantages. However, like every other payment method, it has consequences if not handled well. It can put a person in a debt spiral due to carelessness. Read further to know the importance of timely credit card bill payment.
Disadvantages of Late Credit Card Bill Payment
The credit card lets the customer borrow money on the condition that it has to get paid in later stages. The failure in payment may invite the following consequences.
- Additional Fee – According to the rules, they will charge a penalty if the credit card holder fails to clear dues even after three days of the payment date. This penalty will be added to the customer’s next bill cycle, which can be a pretty good amount. Avoiding late payment habits if it inquires about money loss instead of gain is best.
- Interest-Free Period – Credit card provider offers an interest-free period for customers. However, the outstanding balance extends if the customer misses the payment due date. After the interest-free period lapses, interest will get charged on the outstanding balance and purchases.
- High-Interest Rates – If the credit card payment remains unpaid for more than 60 days, the companies will issue penalty interest on the outstanding balance and new purchases and withdrawals. This penalty charge may differ according to the company. Although for many companies it is 30%. It will be implemented without consideration of the previous payment record.
- Affect Credit Score – The late credit card payment structure may affect a customer’s credit score and lower the chances of receiving the loan. The bank will report untimely payments to the credit companies, resulting in poor credit scores. Due to poor credit scores, it is also possible to make interest rates higher for customers’ future loans.
- Stress – Credit companies will try their best to collect their money back at any cost. It can give the customer and their family unbearable pressure and stress. If the customer fails to repay despite their effort, the collection agency can report the credit account as defaulting on the credit report, which can lead to legal procedures.
- Deactivation of Credit Card- If the customer gets added to the defaulter’s list, credit card companies will terminate the credit card immediately.
How to Avoid Late Payment Risk?
- Auto Payment – Most of the time customers forget the bill date. This problem can be sorted with the help of automated payment reminders. The customer can set the reminder a week before the due date on the online apps. It helps them to pay bills on time and avoid the risk of penalties.
- Change the Habit – Most people tend to pay the bills for the last date. Sometimes customers have to pay an extra price for this. Hence, it is best to avoid this practice as early as possible.
- Make payment Smartly – The online payment method is an easy and smart payment option. The digital platform allows the customer to pay from any part at any time with zero. As online payment options, customers can try different digital platforms like This platform offers the benefit of paying the credit card bill of any bank. For example, MobiKwik allows customers to pay SBI credit card bill payment or other credit cards on the same platform.
Conclusion
Credit card is a great financial tool. However, it can be a burden if it is not handled with care. Hence make your needs specific before using a credit card, and don’t forget to credit card bill payment on time to avoid risk factors.
