In recent years, the credit card market has grown at a tremendous pace as more individuals are opting for these payment cards due to their convenience. However, a significant percentage of users lack proper understanding regarding essential aspects of a card such as minimum payment, billing cycle, the total amount due, etc. Consequently, they end up defaulting or making a late payment on their credit card.
Since credit cards are a type of unsecured loan, defaulting or late payment can lead to a debt trap. Hence, here are some of the ways that credit card users can adopt for online credit card payment –
- Prioritize your payment
Individuals with debt incurred through multiple credit card usage should prioritize the repayment for cards or cards carrying a high-interest rate. After the debt on credit cards with significant interest rates are paid off, one can move on to those with lower interest rates.
This way, one will accrue less interest while repaying the debt, even though it may require more time.
One can also follow the snowball method to repay their credit card debt. In this method, users should focus on repaying the outstanding balance on cards with low interest first and then move on to cards with high interest.
- Balance transfer facility
Card users with substantial arrears can avail balance transfer facility to repay their credit card debt. In this case, they should opt for a balance transfer credit card that comes with a pre-determined interest-free period.
Individuals can opt for online credit card payments during this period to avoid interest accrual. However, while opting for a balance transfer credit card, individuals should consider factors like low-interest rates and nominal joining, and annual fees.
- EMI conversion
Individuals can also opt for credit cards that allow them to pay off the outstanding amount by converting it into monthly installments. During EMI conversion, users also have the flexibility to choose a repayment period within 3 to 24 months according to their convenience. However, users will have to pay interest as well as processing fees on the outstanding amount.
Additionally, a Bajaj Finserv RBL Bank SuperCard also allows users to pay for purchases at online market places in EMIs. Such cards also offer reward points on every purchase. One should know how to redeem RBL SuperCard reward points to save more during transactions.
The financial institution also extends pre-approved offers on an array of products like credit cards, personal loans, and business loans to accelerate the application procedure. Individuals can easily check their pre-approved offer by entering information like their name and contact information.
- Avail seasonal offers
Financial institutions and credit card companies provide an array of attractive offers during the festive seasons. This includes waivers on joining fees, low-interest rates, and other perks and benefits such as accelerated reward points. Users can repay their arrears during this period to save on interest repayments.
- Negotiate with the credit card company
Users who cannot complete online credit card payment can consider negotiating with their credit card company regarding the settlement of the same. Financial institutions or credit card companies generally provide three types of settlement – lump-sum, work-out or hardship agreement. Hence, individuals should review their options carefully and opt for one according to their financial condition.
One should, however, remember that credit card debt settlement can significantly impact one’s credit history. Therefore, cardholders should only settle for this option as a last resort.
Additionally, individuals who have just opted for a credit card should avoid paying the minimum due amount. It is because, while card users paying the minimum due amount can opt-out of paying the late fees, they still have to pay interest on the outstanding amount resulting in a debt trap. They should also know how to read their credit card statement correctly to understand about billing cycle and grace period.
Thus, a credit card is an essential payment tool that will enable one to achieve all of his/her short term financial goals. However, it should be used in a responsible manner which includes making timely repayments.
