A report by the RBI revealed that the credit card outstanding balance crossed Rs.1 lakh crore during the first five months of this fiscal year. A major reason behind it can be attributed to irregular credit card bill payment pattern. The amount further balloons due to a higher interest rate on the unpaid dues.
Following are some of the tips that individuals can follow to reduce the interest burden on the outstanding balance.
Every credit card comes with an interest-free period. It only applies if the outstanding amount is paid in full. It means any new purchase will not accompany the interest-free facility if the card dues are not paid in full.
Another useful way to reduce interest burden on credit card bill payment is by converting the bill amount into small EMIs. It helps individuals to pay the bills more conveniently. Moreover, cards like the Bajaj Finserv RBL Bank SuperCard also let individuals repay a personal loan in availed against the card’s limit in 3 easy EMIs, thus cutting down on interest accrual.
Further, if one withdraws cash from an ATM using a credit card, he/she should deposit the amount back the earliest to avoid paying high interest.
Finally, cardholders can opt for a balance transfer. However, in that case, they need to be in possession of another credit card.
