New Delhi, Business Desk. It is not only wise to keep and use a credit card, but it is prudent to use a credit card properly. Mistakes in bill payments of credit can cause further damage. Therefore, before using the card, know some important things.
Credit card rollover balance: If you are paying the credit card bill after the date has passed, then you should be careful in this, before you make this mistake, you should be aware of the charges levied on it. If you do not pay the bill on the due date, then you will also have to pay a penalty along with higher interest on paying the credit card balance.
Make sure that you have paid the entire credit card bill before or at the end of the due date. Even if you are asked to pay the mandatory 5 percent on the due date, then you pay 100 percent. You may have to pay an interest rate of 36-42 per cent per year or more for carrying the arrears.
Credit card rollover balance
Over rolling anyone has to pay a high-interest rate until the entire balance on the card is paid in full. In addition, interest-free period benefits are not available. Usually all credit cards offer an interest-free credit period on the card before the due date, however, this benefit will not be available if the entire previous bill amount has not been paid. Apart from this, the period of interest free loan can be from 20 to 50 days. However, this does not apply if the previous month’s balance has not been paid in full or the cardholder has availed cash from any ATM.
So, even if you have a balance of Rs 2,000 on your card and you make a new purchase in the next month, you will not get any interest on the new purchase.
Further, if one fails to pay the minimum amount due, the penalty can be up to Rs 900 depending on the amount due. If you have an outstanding balance, it is better to pay the outstanding amount and then make a new purchase. If not cleared, the outstanding balance will fall into the debt trap and will also damage your credit score.