Credit Card Bill Payment aaya? Total due aur minimum due ka farak samjho, interest charges se bacho simple words me full information.
Summary
Using credit card has become very common these days. Today everyone has one or more credit cards. But when the bill comes, there is confusion “Should I pay total due or just minimum due?” This confusion itself traps people in the interest trap. I believe that if you use credit card, then you must have this basic knowledge. Know what you should pay and what not to pay so that we don’t get trapped in the interest trap.
In this blog, I will explain to you in a simple way what is the difference between Total Due and Minimum Due, what is the meaning of both, and which option should you choose when. I only believe that you should always take smart decisions and never make mistakes in the interest or penalty circle.
Introduction
Nowadays, using credit card has become a common thing and people like credit card a lot and credit card is such a facility which helps you to buy anything without cash or in case of any emergency. But if you do not clear your bill on time, then this facility can become a big problem for you. People in India are often confused – “Is it enough to pay minimum due or do I have to pay total due? People are always confused?” and the decision depends on your credit score, interest and your entire financial future. Whatever may be the case, good or bad, today we will understand it clearly.
What is Total Due?
Total Due means whatever money you have spent or spent (purchases, charges, interest) in the entire billing cycle, whatever is the total amount of all of them, that is called total due. If you pay the entire Total Due on time, then you do not have to pay any interest and your credit score also remains safe. And the bank also gives you many offers. And the total due is the total amount of what we have spent.
Advantages of paying Total Due:
1. No interest is charged: In India the credit card interest rate is 24–48%, think how much more expensive it will be for you if this interest is charged.
2. Credit score improves: Paying the full payment on time shows the credit company that you are a responsible user. Then your credit score is increased.
3. There is no loan or debt: You remain clean and debt-free. And there is no load or tension of any kind on you.
4. You get full benefit of rewards: If you pay your bills timely then banks give you lots of rewards and cashback which you can take full advantage of during shopping and in other ways also.
But when can there be a problem?
If you do not have money to make the full payment at that time.
You have to pay the bill by withdrawing money from the emergency fund, which can create problems for future emergencies and can also take you towards some big problem in future which can put you in a lot of trouble.
What is the minimum due?
Minimum due is the amount which you have to pay as little as possible so that your credit card remains active and late fees are not charged. This is usually 5% of the total due and the bank gives minimum due so that the customer can pay in an emergency when he does not have money and the minimum due is a small part of the total due.
Advantages of paying minimum due:
1. If you do not have the full amount to pay, it gives a short-term relief which can save you from late fees and your credit card from defaulting.
2. You are saved from late payment charges.
3. Your credit card does not get blocked.
But the problem is here as well:
1. Heavy interest is charged on the remaining amount, which increases your debt and your total account comes to be quite high.
2. Your credit score starts falling slowly. If you always pay only the minimum due, then it also spoils your credit score.
3. You get caught in the trap of interest. You feel that you are paying the bill but you are only paying the interest. Getting caught in the trap of minimum due interest is very difficult and you also suffer a lot of loss.
4. Sometimes banks also cancel your rewards, offers, coupons and cashback, due to which you do not get any rewards.
Total Due vs Minimum Due
| Aspect | Total Due | Minimum Due |
|---|---|---|
| Interest | No interest | High interest |
| Credit Score | Improves | Gradually decreases |
| Debt | No debt | Keeps increasing |
| Short-Term Relief | Slightly difficult | Seems easier |
| Rewards | Full rewards earned | May get canceled |
When should Total Due be filled?
When you have the full amount available to pay.
When you want to avoid interest and penalty and do not want to pay any kind of extra money.
When you want to become debt-free and financially strong and you want to make your future financially strong.
When should Minimum Due be filled?
When you do not have money to pay the entire total due and need some time, then you can pay the minimum due.
When you think of clearing the entire balance in the next billing cycle and plan to make the full payment in the next bill.
When an emergency expense has come up and full payment is difficult.
Advantages of Paying Credit Card Bills on Time
Benefits of paying credit card bill on time
Nowadays everyone has a credit card. But often people forget to pay the bill on time. But do you know how many benefits you get if you pay your credit card bill on time? Let’s understand them one by one in simple language:
1. Credit score improves
When you pay your bill on time, banks feel that you are responsible. Due to this your credit score gradually starts increasing. And when the score is good, then only it becomes easy for you to take a loan in future.
2. You avoid paying extra money
When you pay the entire bill (total due) in one go, you do not have to pay interest or any late fee. This means that you avoid paying unnecessary money. You can use this money for some other work.
3. You gain control over your expenses
When you start understanding your daily expenses and make payments on time, you also understand where how much money is going. This habit makes you financially strong and also saves you from unnecessary expenses.
4. You get good offers in future
If your credit score is good, then the bank itself starts giving you options like loan, EMI offers, or increasing credit limit. Sometimes you can get a loan at a low interest rate.
5. You remain tension free
The biggest advantage is that you do not have to worry about late fees. Neither do you get repeated reminders, nor is there any stress. Make the payment on time once, and the rest of the month passes comfortably.
Disadvantages of Failing to Pay Credit Card Bills on Time
If you do not pay the credit card bill on time, not only money but also your financial health is at risk. Here we will understand what problems can arise due to not making payment on time:
1. Late payment charges are levied
When you do not clear the bill before the due date, the bank levies late fees on you. This amount is not small – sometimes it can be ₹ 500, ₹ 1000 or even more. And this continues every month until the bill is cleared.
2. Have to pay high interest
When you miss a payment, the card company can charge you a higher interest rate than normal. This means that the same things become very expensive for you which would be cheaper if you pay on time.
3. Credit score drops
The biggest disadvantage is that your credit score drops. And when the score goes down, you face problems in taking personal loan, car loan, or home loan – either you are refused or you get it at high interest.
4. Money tension and stress increases
When your balance is not repaid, the interest keeps increasing every month. Slowly you fall into a debt trap where you only pay the minimum dues but you never know when you will actually pay the money.
5. Financial Freedom is lost
When you are busy paying late fees and interest every month, it becomes difficult to fulfill your real needs. Your money is not in your control and you fall into a trap a fixed lifestyle is formed in which it becomes difficult to even think of something new.
Helpful Tips for Credit Card Payment
1. Set payment reminder: Set due date in calendar or app.
2. Enable auto-pay: Set at least minimum due in auto-pay.
3. Track spending: Check your spending once every week.
4. Make a budget: Allocate a fixed amount to a credit card every month.
5. Avoid cash advance: This is very costly – use it only in emergencies.
6. Contact the bank: If you are not able to pay the bill, talk to the bank – sometimes they help.
If you pay the bill on time, it will be beneficial
Your credit score will become strong
You will be saved from interest charges
You will be able to do smart budgeting and set your future
It will be easy to get a loan in future
If you do not pay the bill on time, it will be harmful
Late payment charges will be levied
Interest will increase
Credit score will fall
It will be difficult to get a loan in future
My Opinion
I always believe that if possible, one should always pay the total due. Minimum due is only a temporary option – but if you start depending on it, then it silently puts you in a debt trap. You feel that you are paying the bill, but in reality you are just paying the bank’s interest and this takes you to ruin and you may have to face a lot of problems and your connection with the bank may also be spoiled in future.
If it is difficult to make full payment, first control your expenses, limit credit card use and start budgeting. This will give you some support.
Conclusion
Your credit card is a facility for you, but if you do not manage it, it can become a burden. Paying total dues is always the best option, whenever possible. Use it for minimum time only when there is a short-term problem and you can clear it completely next month.
I feel that every user should use credit card after understanding and thinking properly. Only then you will be able to make the best use of this tool – without any stress, interest or burden. This is such a thing which can make you financially strong in future and can also make you weak. We should always use it with correct information.
