Everything You Need to Know About Credit Card Billing

A credit card is a tool that offers you a much needed financial independence. Moreover, it gives you an easy opportunity to build your credit and earn rewards/benefits. There are several types of credit cards and you should find one that will be suitable for you and give maximum benefits. One of the first things you should understand about credit cards is that they come with a credit limit. As the name suggests, a credit limit refers to the maximum spending limit on your credit card. The credit limit depends on the type of card. Banks or credit card providers offer you credit card after taking into consideration several factors like income, credit history and so on. How you use your credit card limit impacts directly on your credit score. Therefore, it is important to focus on your spending patterns and keep an eye on your credit card limit.

What is a Credit Score?

A credit score is a numerical representation of your creditworthiness. It is a 3 digit number that ranges between 300-900. The credit bureaus in the country compute your credit score based on your repayment and credit history. The credit score is present in a credit report along with your personal information, credit accounts, loan types and so on.

Let’s take a look at some of the frequently asked questions related to credit card billing:

How to Manage Credit Limit?

First and foremost, you should get a fair understanding of your financial goals and get a credit card according to the requirement. It is important to pay your credit card bills before the due date as it is one of the biggest factor that makes your credit score. Secondly, it is advised pay bills in advance as you free up your credit limit. This gives you an opportunity to make additional purchases. A higher credit limit gives you the liberty to buy expensive items like TV, smartphone with your credit card. You can visit the bank directly or apply for a credit card via online as the process is efficient and much faster. Another benefit of getting a credit card is that it offers you EMI options which comes in handy at the time of buying expensive items.

How to Avoid Interest Charges on Credit Card Bill?

In order to avoid paying interest charges, you have to make sure to pay all the bills/EMIs on time. Late payment of non-payment of bills hampers your credit score and brings it down. Moreover, you end up paying late payment fees and interest charges. You should also avoid paying minimum amount due and make it a point to pay full amount of the bill. If you miss the due date or pay only the minimum due, your balance will accumulate interest. Any subsequent purchases on your credit card will also accumulate interest from the date of purchase. You also lose out on your interest-free period.

Having a credit card is definitely a comfort provided you make sure to pay the bills on time. Hope all the aforementioned points give you a clear idea on your credit card bill payments.