How To Avoid Delay In Credit Card Payments And Why It’s Important – News18

In recent times, the use of credit cards has become increasingly prevalent among individuals for managing their finances. While this may serve as a good sign in terms of financial management, the concern lies in the fact that there has been a constant surge in the number of people failing to pay their credit card bills on time. The latest report from TransUnion CIBIL highlights an increase in credit card defaults in June 2023, indicating that more people are spending money on credit cards but are struggling to repay their dues promptly.

The reasons behind this rise in credit defaults are multifaceted, encompassing factors such as the escalating cost of living, job losses, and economic downturns. With the growing popularity of digital e-commerce and increased online transactions, customers find it easier to shop and borrow, often without prudently considering their financial situation. They end up overspending, leaving them with inadequate funds to clear their credit card bills.

For those grappling with credit card debt, it is crucial to devise effective strategies to avoid late fees and safeguard their CIBIL scores. One such approach is to balance transfer from one credit card to another. Many banks and financial institutions now offer this facility, enabling customers to transfer outstanding balances from one credit card to another with a higher credit limit. This can provide some relief by allowing individuals to consolidate their debts and manage their repayments more effectively.

Another viable option is to convert the repayment amount into equated monthly instalments (EMIs). By opting for this method, credit card bill payments become more manageable, as individuals can make smaller payments over a period, alleviating the burden of paying the entire amount in one go. This can be particularly beneficial for those unable to arrange a lump sum to clear their credit card bills promptly.

Prioritising loan repayments is also crucial for individuals who have multiple loans. Assessing the outstanding amounts and interest rates on each loan can help determine which loan to repay first. Prioritizing loan repayments allows individuals to focus on clearing high-interest loans, which can ultimately lead to faster debt reduction and improved financial stability.

While a couple of missed credit card payments may have only a short-term impact on credit scores, prolonged defaulting can severely hamper one’s creditworthiness. Credit scores are vital when applying for loans, as lenders heavily consider an individual’s credit history to gauge their creditworthiness. A series of missed payments over an extended period can significantly reduce the chances of loan approval, making it challenging for individuals to access credit when needed.