It’s high time now for people to worry about credit cards bills and interest because of most of the online shopping websites like Flipkart, Amazon, and Snapdeal offering Zero proccing fees and No EMI in festive seasons like Diwali. Apart from that most of the e-commerce offering attractive addon discount with credit cards like HDFC Bank, AXIS Bank, SBI Bank.
Credit cards are the good option. however, It should be used in a right manner.
In order to avail these offers we should have sufficient credit limit, however, most of the people are unaware about the billing cycle of the credit cards and interest rate. Thought credit cards have been good option to use anytime anywhere without having money handy but we should have a complete understanding of using credit cards like billing cycle, interest rate % and grace period.
As per my experience, people get excited once they get their credit card and starts using it without having an understanding. while making payment of credit card. we only focus in on minimum amount rather complete payment. This leads to a bad debt due to not paying the full amount.
Let’s understand the minimum amount of credit card.
It has been observed that most of the people believe in paying the minimum amount rather complete cycle bill. Paying minimum means paying interest on cycle bill and this includes some percentage of original cycle bill. So, Basically, the minimum amount is a kind of interest rate of original amount used in that particular cycle and complete due amount.
Best way to stay away from Bad Credit is to be on time especially while making payment. Not only minimum amount rather complete cycle bill so that you can use your credit card longer. Being on time gives you bank credit and rewards which can be used while shopping anywhere.
Let me explain to you why your credit card bills seem to be high. As per your knowledge, you think that you’ve paid the minimum balance to avoid extra charges however you have been charged interest rate over your all expensed total bill amount.
Usually, we do not care about actual bill however if you see your bill, It will clearly mention all the interest charges.