Credit Card users are primarily interested in the amount due than the other contents of their statements. While this is understandable, there’s also other information on your bill that you should keep an eye on. Such information can impact your Credit Card liability and any incorrect information may inflate your payable amount.
Apart from basic information like your name, card number, address, and nature of transactions, you should definitely know about these things:
Statement date – The Credit Card statement date or billing date is the day on which your card statement is generated monthly. The date is typically printed on the top of the statement page. If you were late in paying the previous bill, you will be charged interest, which will be calculated taking the statement date as the first day.
Payment due date –This is the date by which the bank expects to receive the due amount from you. It is not the date on which payment has to be made. If there’s a time lag expected between your payment and the company receiving it, the payment should be made a few days in advance. For example, a cheque payment may take 2-3 days to reflect as a receipt for the Credit Card company, so you should deposit the cheque a few days before the payment due date.
Billing cycle –This is the 30-day period for which the statement is generated. It is the period between two consecutive statement dates. The Credit Card bill is a reflection of the transactions made during the billing cycle, apart from the interest penalty and late payment fee (if any).
Grace period –The Reserve Bank of India (RBI) has notified via a circular that the late payment charge on a card is to be effected only if the amount due is not paid for more than three days from the payment due date. If not paid within the grace period, the interest will become applicable and will be calculated from the payment due date.
However, you might have noted that Credit Card companies allow a period of 20-25 days from the end of the billing cycle until the payment due date. This period is referred as the ‘grace period’ in common parlance.
Transaction details –This includes the purchases and borrowings made during a billing cycle, along with the date, amount, and particulars of the transaction. Apart from the purchases, it will also include cash advances, interest, and charges (if applicable).
Total amount due –This is the aggregate of the transaction value during the billing period, any amount outstanding carried forward from the earlier bill, the interest charged, late payment fee, and any other charge or penalty that may be applicable.
Minimum amount due –In a typical Credit Card bill, the minimum amount due could be anywhere from 5% or Rs 200 (min), which ever is more of the total amount due. However, the minimum amount due is not exactly what the name suggests. In fact, the only respite you get by paying the minimum amount due is that the late fee is waived. If you regularly pay only the minimum amount, interest on the unpaid amount becomes due instantly, leading you into a debt trap. Therefore, it is advisable that you ignore the minimum amount due and pay the total amount due or as much of it as possible.
Credit limit availability –The card company fixes a credit limit on every Credit Card. For example, if your credit limit is fixed at Rs 2,00,000, you can use the card up to that amount only. Your unpaid amount at any given point of time cannot exceed the credit limit. So if your unpaid bill amount is Rs 1,80,000, you can spend a further Rs 20,000 only. To spend any more than that, you will have to first settle the unpaid bill amount or part thereof.
Cash advance –Another feature of a card you should be wary of cash advance. Credit Cards can be used to withdraw cash from ATMs. There is a monthly limit on the cash advance one can avail of, and it’s a percentage of the credit limit. But these transactions attract a high fee and the interest rate can be sky-high as well.
Reward Points – Reward Points are a star attraction of Credit Cards. People judge a card based on the points rewarded and how well they can be redeemed. When it comes to rewards, HDFC Bank Credit Cards provide offer tempting reward, discount and benefits too. A card statement always mentions the reward point summary that shows how many points you have at the beginning of the billing cycle and how many you have earned through your transactions during the billing period.
Remember to redeem your Reward Points within their validity period. The points can be redeemed by using them to buy a product or gift voucher of your choice from the range offered by the Credit Card company.
Becoming familiar with this kind of information lets you understand how it bills you, and also allows better control over your card usage. You will be able to use your more effectively, avoid the dreaded debt trap, and cut down on unnecessary Credit Card-related expenses.
With HDFC Bank Credit Card you stay aware of all relevant information through a wholesome range of support including guidance videos, FAQs, transaction alerts and a dedicated customer center to act upon your complaints, queries and feedbacks.
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* Terms & conditions apply. Credit Card approvals are at sole discretion of HDFC Bank Ltd. 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.
