What is Credit Card Billing Cycle and Due Date?
28th August’ 2024
A Credit Card is a convenient payment tool that provides you with the benefit of buying now and paying later. The transactions you make in a particular billing cycle are billed to you every month. You must repay the bill amount before the due date to restore your credit limit and avoid defaulting on your payments. Here, you can get information on Credit Card due dates and billing cycles.
Cardholders shall be provided option to modify the billing cycle atleast once of credit card as per their convenience by contacting phone banking, through e-mail (to customerservices.cards@hdfcbank.com) or sending physical letters as updated in MITC.
Components of Credit Card statement
As a Credit Card user, you ought to know the following terms:
Length of billing cycle
The length of billing cycle can vary across card issuers, but it typically ranges from 28-31 days. Transactions made within this time frame are eventually billed. The time period between two consecutive statement dates is the billing cycle’s length.
If you have multiple Credit Cards, make sure of each of their billing cycle and due dates. This is because every card can have a different billing cycle.Statement date
After the billing cycle is over, the card issuer will compile and process all the billing information. The card issuer issues a statement of all the transactions on a particular date, known as the Credit Card bill generation date or statement date, which you can select at the time of card activation.
Your Credit Card statement summarises your Credit Card activities. It contains previous balances, purchases during the billing cycle, ongoing Equated Monthly Instalment (EMIs), outstanding amount, interest charges, late fees (if any) and the new balance.
Repayment period
After Credit Card bill generation date, there is an interval within which the card holder must pay their dues. Companies typically offer a 10-15 day repayment period for Credit Card bills.Credit Card payment due date
The day when your grace period is exhausted is called the payment due date. Now, it is crucial for you to pay the entire outstanding balance to avoid any late fees.Outstanding amount
Your outstanding balance is the amount that is required to be paid after your bill’s grace period. It also includes dues of previous months, if any.Minimum amount due
It is a part of the total outstanding balance that you could pay to avoid late fee charges. If you do not pay the minimum amount due before the Credit Card payment due date, your credit score will be impacted. In most cases, the minimum amount due could either be a percentage of the Credit Card bill or a fixed amount, whichever is higher.
Illustration
Let us assume your card’s statement generation date is 15th of every month and the payment due date is 5th of the month following the month when the statement was generated. So, if you receive a ₹10,000 bill on the 15th of January, you have time until 5th of February to pay the bill. You can either pay the full bill amount or pay the minimum amount due (let’s assume this as 5% of the Credit Card bill amount). If you chose the former option, your credit limit will be restored. If you pay only the minimum amount due, i.e., ₹500, your outstanding will be ₹9,500 (₹10,000 – ₹500). Interest charge will be levied on ₹9,500 which you need to pay in the next billing cycle.
To keep things simple, the Reserve Bank of India (RBI) has mandated all Credit Card issuers to offer a one-time chance to all credit holders to change their billing cycles. Therefore, instead of making late payments or potentially defaulting on the payments, you can ascertain a billing cycle that works for you.
Looking for a rewarding Credit Card? HDFC Bank has you covered.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
