Although the word ‘plastic’ bothers people in a wrong way these days, but there is one thing which people are very fond of, yet the word ‘plastic’ in it is – plastic money. Steeped in attractive deals, convenience and security, plastic money is one of the most preferred forms of transactions. As a result, credit cards have found a pocket in almost every wallet. According to the reports, India There are approximately 64 million credit cards in circulation as of 2021.
There are several things you should know before becoming an avid credit card user. The list goes on of medium length. However, the first and foremost thing you should know is the billing cycle. The billing cycle acts like a skeleton on which factors such as spending patterns, utilization and credits depend. If you are a multiple credit card holder, the billing cycle needs utmost attention.
Credit card billing cycle refers to the period at which, at the end of which, a statement containing all the required details and numbers is generated. This tenure can be anywhere between 28 to 32 days and starts from the moment you activate your credit card. All transactions, cash withdrawals, transaction and finance charges, outstanding balance interest, etc., are mentioned in the statement given after each billing cycle.
A statement is generally prepared as of the date on which you need to clear your outstanding credit card balance. Although there is no obligation to pay the entire credit card amount, you will be required to pay the listed minimum charges as per the requirements. If not, it can have a negative impact on your credit score, which brings to the fore a variety of problems.
The minimum fee is usually a small fraction of the total amount you pay. Credit cardholders are required to pay a minimum fee to avoid late fee charges and keep their credit card account alive. However, it should be kept in mind that after paying the minimum amount, the balance is sensitive to interest and can go up to 48% per annum. So it is better that you pay the full amount before the due date. The due date has been set somewhere between 21 to 25 days since the generation of the last bill.
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