Why Is It Essential To Make Timely Credit Card Payments?

Why Is It Essential To Make Timely Credit Card Payments

A credit card is similar to a debit card, and you can use both cards to make payments. However, with a credit card, you don’t need to have money in your account to make a payment. Instead, the money is credited to you for the time being from your bank or financial institution.

How Do Credit Card Bill Payments Work?

The money that the creditor allows you to use is the credit or small debt that you borrow. You are required to return this money after paying the amount and the interest levied on it either directly to the bank or via platforms such as MobiKwik. Institutions offer leniency in credit card bill payments. You can either pay the whole amount in the lump sum or make monthly payments like any other installments. This installment consists of the principal borrowed amount and the interest rate. The terms and conditions of the installments will vary from creditor to creditor.

Reasons Why You Should Be Making Your Credit Card Payments On Time

There comes a time in our life when we are low on cash or might have other financial commitments that we first need to attend to. However, experts always advise not to hold off debt payments as it will affect your finances thereon.

  • Penalty fee:

Every time you fail or skip your credit card bill payment, the bank or the institution levies a late fee on you. A penalty fee will be based on the amount that you have borrowed. Higher the amount, the more penalty fee you will have to pay. Some institutions increase the penalty fee if you fail to make a payment even after the grace period.

  • Higher installment:

If you fail to complete the installment, then that installment is added to the next month’s installment. Unfortunately, this also increases the interest levied on the amount. As a result, you will pay more as an installment in your next billing cycle.

  • Healthy credit score:

Although it is not officially a loan, it is technically a credit that you borrow from an institution. Not paying it off in time can alter your credit or CIBIL score. CIBIL score is the points that the institution grants you for making payments on time. Your chances of getting loans in the future are based on the healthy CIBIL Score. Some institutions mention the CIBIL score as one of the eligibility criteria.

  • Increase credit limit:

Some institutions offer loyalty bonuses to individuals who make their Credit card bill payments in time. These bonuses include an increase in the credit limit. The credit limit refers to the maximum amount you can borrow in the given time. If you are diligent on your bill payments, institutions put you in the low-risk category and let you borrow more.

  • Defaulters list:

If you consistently fail to make your credit card bill payments, then banks put you on the defaulter’s list. Once you are on the list, no institution will grant you a loan in the future. Also, you are then required to make the payment of the borrowed amount in a lump sum. Some institutions also put you on the collector’s list, which is not at all a good circumstance.

How Can You Make Your Credit Card Payments?

With digitalization and the internet, you can easily make your credit card bill payments.

  • Internet banking:

Banks allow their customers to make payments via internet banking.

  • First, you will have to register for your bank’s internet banking facility


  • Then, visit the official website or download the app for your bank.
  • Log in using your credentials.
  • Navigate through the site for credit card payment.
  • Put in the amount and make payment.
  • Auto Debit:

You can also opt for the auto-debit facility with your bank. The bank will debit the installment amount directly from your account whenever the due date approaches. You do not have to worry about remembering the due date or having to go through the payment process.

  • Mobile wallets:

Mobile wallets or digital wallets are the easiest ways to make any payment. Multiple wallets ensure the smooth transaction of the bill payment. For e.g., You can download or visit the website of MobiKwik. This digital wallet is simple and easy to use. You can use it to make credit payments like HDFC Credit card payment, Axis Bank Credit Card Bill payment, Citi Bank Credit card bill Payments and other Bill payments Also..

  • UPI ID:

Government UPI ID is also among the safest and easiest ways to make credit cards and other bill payments. You only need to download the UPI app and generate the UPI Id. It is a unique ID that will make credit card bill payments safer.


A credit card allows users to make payments even if they are low on cash on the trust that the user will be paying them back in time. If you make timely Credit Card bill payments, you are sometimes awarded more perks and benefits. However, if you fail to do so, then you will have to pay more money as interest, and it will also jeopardize your other financial commitments.