Strategies for paying your Credit Card Bill on Time, Every Time

A credit card is a fantastic tool to fulfil our aspirations, the only preamble is that we should pay the outstanding money reflecting on our credit card statement by the due date. As customers, we have on an average more than a month to pay off the outstanding amount, if you factor in the actual purchase date (of a product, for instance) and the credit card statement (which is generated on a particular day every month) and an interest-free period of about 20 -25days till the actual due-date. In spite of this kind of leverage, many people fail to make their outstanding bill payments.

Few of the reasons that people are not able to pay their credit card payments are due to negligent spending, irrational spending, financial emergency, or simply unpredictable delay in making payments. Due to delayed payments over a period of time, the customer is swallowed in a deluge of interest payments like finance charge, late payment, over-the-limit fees; etc., over and above his or her outstanding loan. This does not mean using a credit card is bad, it just means that one has to be disciplined about making timely payments.

Here are 3 smart ways in which you can ensure that you make timely payments on your credit card bill.

1. Being Proactive with payments – You can use a reminder app that notifies you about outstanding bills to be paid. Remind yourself that you get reward points for purchases and they may be forfeited if you do not make your payments on time. If there are any purchases that you do not understand, call up the credit card company and find out if you are able to figure out the source of transaction. Also, in case you are late in making payment due to a certain valid reason, you can inform the customer service and they should be able to waive off the late charges. Do not carry a balance on any credit card for more than two months max. If you get a windfall money like a tax refund, mutual fund dividend, bonus, etc.; use it to drive down the balance on your card to zero.
2. Use the EMI option for purchases, if you cannot pay in one-shot
   An executive working for a software company wanted to buy an expensive piece of furniture for his new home. So, he used the credit card with 0 per cent APR for 12 months. He knew that he could be able to comfortably make the payments in that period; so he arranged with the bank to automatically debit the payments towards the purchase. He is now proud of the compliments showered by guests for the furniture. He could own the intricate piece of wooden beauty without feeling a pinch, because he was disciplined enough to time the payments in a systematic manner.
3. Use your own limits – Forget the available limits on your credit card, you have to mentally frame your own spending limits and ensure that you do not go above that, unless you are buying a product or subscribing to a service which is absolutely necessary. Do not splurge on your credit cards, use them only when you know you are able to pay back comfortably. You may use your credit cards for flight tickets, hotel bookings, car rental etc, because you get a lot of deals, discounts and money-back offers which lower your payments. However, refrain from spending credit cards on buying back-to-back items off a store, because then you may end up with a large balance caused due to irrational spending.