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When you fail to make your credit card bill payments, not only does your credit score take a hit, but you also show bad repayment capabilities.

Reports show that credit card usage in the country has witnessed an average year on year growth of well over 30% through 2018. Additionally, the value of all transactions by 2018’s fourth quarter amounted to Rs.1,431.3 billion. Given these numbers, it is important to know that every time you use a credit card, you borrow money from your financier to carry out the transaction. At the end of your billing cycle, your financier issues a statement containing your total outstanding amount and giving you the option of making a minimum or full repayment.


Figures show that close to 92% of Indians consider making timely credit card bill payments vital to their financial success. Wondering why this is regarded as a valuable habit? Read on to know more.

Late fees and a higher rate of interest start piling on


Putting these together, late payment of bills makes for an poor credit history on the whole. This decreases your credit score. Pixabay

As per your billing cycle, you have to make payments by a particular date. If you fail to pay the balance or make the minimum payment, you incur a late fee and at times a higher rate of interest as well. As per an RBI notification of 2015, a late fee is applicable only if your payment remains outstanding for more than 3 days past the due date. The higher interest rate incurred may apply to the outstanding amount and also to transactions made during the time you have not paid your credit card bill. This can be costly to repay.

Compounding of your outstanding amount can pinch your pocket

A negative compounding effect is created if you fail to clear your credit card debt in its entirety. Consider that you have an outstanding bill of Rs.20,000 and a minimum repayment of Rs.5,000. While making the minimum repayment is good, it also means that you will incur interest on the remaining Rs.15,000. The following month, you will have to clear transaction costs of the past 30 days as well as pay the Rs.15,000 with interest. In this way, if you continue making only minimum repayments, you land up paying interest on interest. The same holds true in case you have not paid your bill entirely.

Higher monthly expenditures will keep recurring

Since delayed payments imply an increasing outstanding amount, you will only carry an additional financial burden every month. When faced with an accumulating outstanding amount, it is important that you clear it at the earliest. This means that for a few months you will have to add an amount dedicated solely towards tackling credit card debt to your budget.

Your credit score takes a beating

Rating agencies consider your history of bill payments when determining your credit score. Another is the manner in which you handle debt. Putting these together, late payment of bills makes for an poor credit history on the whole. This decreases your credit score. A poor credit score implies that you will have a harder time availing loans and other forms of credit in the future, especially at affordable terms.


The higher interest rate incurred may apply to the outstanding amount and also to transactions made during the time you have not paid your credit card bill. Pixabay

You lose out on chances to increase your credit card limit

When you fail to make your credit card bill payments, not only does your credit score take a hit, but you also show bad repayment capabilities. The baggage of these two factors will make it hard for you to obtain an enhanced credit card limit, should you require it.

All of these outcomes can be avoided when you pay your credit card bills on time. Hence, opt for a card that offers you multiple payment options like the Bajaj Finserv RBL Bank SuperCard. Here you can make your credit card bill payment via the RBL MyCard App, Bill Desk, NEFT, net banking, NACH and cheque.

Also Read: AI, Social Media Regulation Find Prominence in Poll Manifestos

The RBL SuperCard comes with other features that make it economical. You benefit from deals, discounts, and offers on products and services ranging from gadgets and accessories to food and travel. Further, this card gives you a 90-day interest-free loan, and allows you to make 50-day interest-free cash withdrawals at ATMs. You can get started availing these benefits in moments. All you need to do is check your pre-approved credit card offer. Doing so gives you instant approval and access to customised financial solutions.


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