Understanding Credit Card Payment for Low Fee and Zero Interest Rate
Having a credit card means you have simplified the transaction and money usage process in your life. However, you must pay your bill. Unfortunately, many people don’t quite understand about credit card payment. That is also the reason why they hesitate to apply for a credit card. For that reason, below, we have the complete guidelines for this matter.
Calculating Credit Card Payment
How to calculate the credit card payment? The first thing you should know about the credit card bills or payment is where it comes from. The number on your credit card bill comes from the three sources that the credit card company uses as the base of its calculation. They are:
– The minimal payment they have set in the beginning. It is the amount you are obligated to pay off.
– The balance you had last month, which will become the base to calculate the interest rate of your bills.
– And, how much you use your credit card for a transaction, plus the transaction type. If you use it over the limit or for a specific purpose, like buying something from a foreign store, you have to pay the extra fee.
If you could optimize each of those three sources, your bills will be much lighter and easier to pay off. Therefore, people with this knowledge won’t get afraid of applying for a credit card. They knew the amount of debt they could afford by calculating those three.
Furthermore, it is also easy to find information about those three from every credit card company. Some laws make every credit card company more transparent about their credit card fee and interest rate for customer needs.
How to Lower the Amount We Have to Pay?
It said with proper knowledge, you can get lower bills than usual. It is true. By knowing what you should do and optimize, you can get the most affordable fee for your credit card. Here are the simple methods to do that.
– Pay the minimum payment before the due date
Even though you use your credit card below the minimum payment limit, we suggest you pay it as much as the minimum payment stated. This move will put you in a good position/impression on the credit card issuer. So, you won’t get fined for breaking the agreement.
Furthermore, you also have to pay the bills before the due date. Whenever you apply for a credit card, there is always a point in the agreement about the late fees. So, to avoid these extra fees for being late, you should pay them before the due date. That is maybe the easiest way to lower credit card payments.
– Pay it full
The minimum payment is the amount of money you should borrow from your credit card company. However, it also has an upper limit that you can’t exceed. That will only add more numbers to your bills that you have to pay.
Now, if you only pay the minimum payment or below the limit, there is the rest of the credit card balance that will be carried over to the next month. A credit card company will calculate this extra balance to decide how much interest rate they will put on the next monthly cycle of your credit card.
Therefore, if you pay in full or equal to your credit card limit, you can remove the extra balance of your credit card at the end of the month. There will be no extra balance for next month. It means the credit card company can’t apply the interest rate to your credit card bill. As you can see, without the interest rate you have to pay, you can cut down the amount of payment you should pay. And, you get a lower credit card payment.
– Improves your credit score
Improving credit score also helps you to lower the payment of your credit card. Why? A credit card user with a good credit score is seen as the low-risk client by the credit card issuer. Therefore, they are willing to provide their service with a lower interest rate.
The interest rate acts as something like collateral, a safety net for the money that credit card issuers lend to you. If you have a bad credit score, they will increase the interest rate because there is a risk that they will lose the lent money. After all, the client couldn’t pay it. However, with a good credit score, the issuer knows that you can pay for the service. Thus, they don’t have to pay higher interest rates.
With a low-interest rate, you can cut down your credit card bills significantly. Best of all, the first two methods we mentioned before also help you to improve your credit score. When you pay the full balance and are never late, the credit card issuer will give a good report to credit bureaus. A good report will improve your credit score.
Therefore, while trying to lower the credit card payment rate you also can build your credit. Then, it also affects the interest rate of your credit card, which also helps you lower the payment. It is a good cycle that allows you to use your credit card optimally.
How to Pay Your Credit Card
The next thing you should know is how to pay credit card bills. Here, we have several methods you can use to pay for your credit card. Most of them are easy to follow. You may have already used them several times before.
– Online payment services – some companies can help you to pay your credit card bills. Their service also allows you to track your credit card payment, so you won’t be late.
– NEFT (National Electronic Funds Transfer System) – this method allows you to pay the bills automatically and directly from your bank account.
– RTGS (Real Time Gross Settlement) – it is similar to NEFT, but this method is suitable for a large amount of credit card bills.
– ECS (Electronic Clearance System) – is also similar to NEFT. However, this method is a perfect choice for you who have a fixed amount of credit card usage.
– Mobile app payments – many credit card issuers also launched a mobile app you can use to pay your bills. You just have to connect it to your bank account to make the payment.
– Visa or MasterCard money transfer – you can visit Visa and MasterCard websites to make payment. Use your bank account to transfer the specific amount of money to pay your bills.
– Bank accounts – you also can visit the bank where you open the account to make a payment. Or, you can use online banking from your bank to do that.
– Cash payment – visit the bank or the credit card counter to pay your bills in cash. It is the fastest method to make a same-day credit card payment.
Now, we believe that you understand what credit card payment is and how to pay it. We hope that you won’t have any problems in the future with your credit card bills. And, if you haven’t applied for a credit card, we also hope this article will give you the courage to get this magnificent transaction tool.
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