Title: How to Avoid Penalties on Missed Credit Card Payments and Protect Your Credit Score
Introduction:
Missing a credit card bill payment can result in penalties and negatively impact your credit score. However, there is a simple solution to avoid these consequences. Read on to find out more.
Content:
If you frequently miss credit card payment due dates, especially if you have multiple cards, it can become difficult to keep track of them all. This often leads to forgotten payments and hefty penalties from the issuing banks, which in turn affect your credit score. Fortunately, there is an easy solution to avoid penalties and maintain a healthy credit score.
To avoid penalties on missed credit card payments, the Reserve Bank of India (RBI) states that you can settle your bill within three days after the due date. By doing so, you can prevent the bank from charging you any penalties and keep your credit score unaffected. For instance, if your due date is today (July 24), you can make the payment until July 27 without facing any penalties or credit score repercussions.
However, if you fail to clear your credit card bill within the three-day grace period, you will incur penalties from the issuing bank and your credit score may be negatively affected. A poor credit score can make it challenging for you to secure loans in the future until you rectify your credit status. In this case, you will also have to pay a late fee, which will be added to your next billing cycle. It’s important to note that late fee charges, penalty interest, and other fees will be calculated based on the outstanding amount after the due date.
The amount of penalty you will incur depends on the total billing amount of your credit card. Different banks have varying penalty structures. For example, State Bank of India (SBI) charges a penalty of Rs 400 for outstanding amounts ranging between Rs 500 to Rs 1000. If the outstanding amount falls between Rs 1,000 and Rs 10,000, the penalty increases to Rs 750. Similarly, for outstanding amounts between Rs 25,000 and Rs 50,000, the penalty is Rs 1,100. Amounts exceeding Rs 50,000 will incur a penalty of Rs 1,300 from SBI. It’s crucial to review the terms and conditions of your credit card before selecting one from a specific bank, as different banks impose different penalty amounts.
To stay updated with the latest information, subscribe to our newsletter today.