Opting for credit card? Know due date, billing cycle and minimum payment calculation here

Opting for credit card? Know due date, billing cycle and minimum payment calculation here

Many people who have a steady salary often opt for a credit card from a bank, as it offers a lot of discounts and points, as well as the option to buy now and pay later. Credit cards have made digital transactions easier and faster, and a lot of people across the country are now signing up for one.

According to reports, India has roughly 64 million credit cards in circulation as of 2021. People have been leaning towards the usage of credit cards for transactions even since the COVID-19 pandemic hit, as it offers a wide variety of discounts and rewards.

If you are planning to sign up for a credit card and use it for your regular transactions, then you need to keep in mind several things such as the billing cycle of the card, the due date, and the minimum payment calculations of the credit card.

The expenditure pattern, usage, credit, and several other factors depend on the billing cycle of the credit card. You need to take utmost care of the billing cycle if you hold multiple credit cards. When the billing cycle of your credit card ends, all the necessary details and numbers are generated.

The tenure of the billing cycle of a credit card can range from 28 to 32 days, depending on the bank. The billing cycle commences from the day you activate your credit card. At the end of each credit card billing cycle, the statement is generated by the bank and sent to you.

A credit card statement includes all the transactions, cash withdrawals, charges associated with transactions and finances, outstanding balance interest, and any other charges or transactions. These are calculated by the bank and sent to you via post or email.

In the statement, the due date by which you need to pay the amount due will also be mentioned. There is no compulsion to pay the entire amount, and you can pay the minimum amount of the credit card bill, as per the bank requirements. The due date is usually 21 to 25 days after you have been sent the statement.

You must pay the minimum charges if you don’t want to worsen your credit score. You need to pay the minimum charges to avoid late fees and keep your card active. It is recommended to pay the entire bill as interest is charged on the leftover amount, which can be as high as 48 percent annually.