Never Pay a Late Fee Again: Smart Credit Card Payment Tips

Late fees on credit cards can quickly add up, putting a dent in your finances and negatively impacting your credit score. In India, the average late fee is between ₹500 to ₹700 per instance. However, with some smart strategies and proactive measures, you can easily avoid late charges and maintain a healthy financial profile. In this article, we’ll share simple and effective credit card payment tips to help you stay on top of your credit card payment due dates and avoid late charges.

1. Set Up Automatic Payments

One of the easiest ways to avoid late charges is by automating your credit card payments. Most banks and credit card issuers allow you to set up standing instructions or auto-debit facilities. This ensures that at least the minimum due amount is paid on time each month, even if you forget or are unable to make the payment manually. Here’s how you can set up automatic payments:

1. Log in to your credit card account online or through the mobile app
2. Navigate to the “Payments” or “Billing” section
3. Look for options like “Auto-pay” or “Standing Instructions”
4. Enter your bank account details and the amount you want to pay each month (minimum due or full balance)
5. Save the settings and you’re done!

2. Align Your Payment Due Date

If your credit card payment due date doesn’t sync well with your income cycle or salary credit date, it can lead to cash flow issues and missed payments. To avoid this, most credit card companies allow you to change your billing cycle and due date at your convenience.

For example, if your salary gets credited on the 5th of every month, you can request your card issuer to set your payment due date to the 10th or 15th. This gives you enough buffer time to ensure sufficient funds are available in your account for the credit card payment.

3. Leverage Payment Reminders

In today’s fast-paced life, it’s easy to forget payment due dates amidst a flurry of other commitments. To stay on top of your credit card payments, make use of reminder services offered by your card issuer. You can opt for SMS alerts, email notifications, or even calendar reminders a few days before the due date.

Additionally, you can set up your own reminders using apps like Google Calendar or any other task management tool you prefer. This acts as a failsafe in case you miss the reminders from your bank.

4. Choose a Card with No Late Fees

If you have a history of missing payments or are forgetful by nature, consider opting for a credit card that doesn’t charge late payment fees. While such cards are relatively rare, there are a few options available in the Indian market that may help you avoid credit card late fees.

Some examples include:

• Citi Prestige Credit Card
• HSBC Premier Credit Card
• American Express Platinum Card

Keep in mind that these cards often come with high annual fees and require a good credit score for approval. Weigh the pros and cons before applying to see if they fit your needs and financial situation.

5. Make Partial Payments

If you’re unable to pay the full amount due on your credit card, try to make at least the minimum payment before the due date. Most credit card companies in India require a minimum payment of 5% of the outstanding balance or ₹100, whichever is higher.

By paying the minimum amount, you can avoid credit card late fees and keep your account in good standing. However, remember that the remaining balance will attract interest charges until it’s paid off in full. It’s always better to pay as much as you can to minimise the interest burden.

6. Utilise the Grace Period

Did you know that most credit cards come with an interest-free grace period of 20-50 days? This means that if you pay your full balance by the due date each month, you won’t be charged any interest on your purchases. Here’s an example to illustrate how the grace period works:

In this case, if you make a purchase on 5th May and pay the full balance by 20th May, you won’t be charged any interest on that purchase. Utilising the grace period can help you avoid late charges and high interest charges on your credit card.

7. Keep Your Card Active

If you have an old credit card that you rarely use, it’s important to keep it active by making small purchases or transactions once in a while. Inactive cards can lead to missed payments and late fees, as you might forget about the outstanding balance or due date.

Set a reminder to use your lesser-used cards at least once every 2-3 months for small expenses like bill payments or online subscriptions. This keeps the card active and helps you stay on top of payments, avoiding unnecessary late fees.

Summing Up

By implementing these strategies, you can effectively avoid credit card late fees and maintain a healthy credit profile. Remember, even a single late payment can have a significant impact on your credit score, which in turn affects your ability to secure loans or credit in the future.

If you’re looking for a reliable and rewarding credit card option, consider credit cards offered by Airtel Finance. With attractive benefits, seamless digital payments, and a hassle-free application process through the Airtel Thanks app, it’s a great choice for savvy credit card users. Plus, you can easily keep track of your credit score and payment due dates using the app, helping you avoid late fees and maintain good financial health.

FAQs

1. What happens if I miss a credit card payment due date?
   If you miss a credit card payment due date, you’ll typically be charged a late fee ranging from ₹500 to ₹700. Additionally, it can negatively impact your credit score.
2. How can I avoid late fees if I’m facing a financial crunch?
   If you’re going through a temporary financial crisis, contact your credit card issuer proactively and explain your situation. They may offer you a payment plan or waive off the late fees as a goodwill gesture.
3. Can I change the due date for my credit card payment?
   Yes, most credit card companies allow you to change your payment due date to align it with your income cycle or financial situation. You can request a due date change online, through the mobile app, or by contacting customer support.
4. What is the minimum amount I need to pay to avoid late fees?
   Usually, credit card issuers require a minimum payment of 5% of the outstanding balance or ₹100, whichever is higher, to avoid late fees. However, it’s always better to pay more than the minimum to reduce your interest burden.
5. How do late fees impact my credit score?
   Late payments are reported to credit bureaus and can significantly lower your credit score. A single late payment can reduce your score by 50-100 points, making it harder to secure loans or credit in the future.