credit card: How to manage your credit card billing cycle efficiently

Arjun is a younger earner, simply having began his profession as a dressmaker. He has began utilizing his new credit card for making some large purchases for organising his studio. He does respect the newly-discovered facility of shopping for furnishings, lightings and many others. on credit score, for adorning his boutique. Nonetheless, he doesn’t fairly perceive the technicalities and the arithmetic of how the bank card works. He’s baffled by the truth that though he pays the minimal stability each month, the quantity payable simply appears to maintain rising. Arjun needs to know the entire working of bank cards, in order that he can handle his finances higher.


Understanding the billing cycle of a bank cards is necessary for financial planning. As soon as Arjun is aware of his card billing cycle, he can use the cardboard to one of the best of his benefit. The billing cycle refers back to the interval for which a bank card invoice is generated. If his bank card assertion is generated on the 10th of each month, his billing cycle will begin from the 11th of the earlier month and proceed until 10th of the present month. He should test together with his bank concerning the actual period of the billing cycle because it varies between 27-31 days.

The billing cycle begins the day the bank card is activated and it would begin with a stability of some upfront price, as relevant on the cardboard. Ranging from that day, all of the transactions on the bank card will get added to the bank card invoice. If any quantity is paid again to this bank cards, resembling a gas surcharge waiver, money or payback or a reversal of any cost made, it’s subtracted from the invoice and the ultimate invoice is generated. Any transaction that’s made after the billing cycle displays within the subsequent assertion. Within the above instance, if Arjun makes a transaction on the 12th of the month, it’ll solely mirror within the subsequent invoice, and can give him extra time to pay it.

The minimal cost on a bank card is the minimal quantity you possibly can pay on or earlier than your bank card cost due date to take care of your bank card account. Nonetheless, Arjun should realise that making the minimal cost doesn’t stop the financial institution from levying curiosity on the remaining quantity. This curiosity might be as excessive as 48% and it will definitely signifies that he’ll take a number of months to repay a single bank card invoice.

(Content material on this web page is courtesy Centre for Funding Training and Studying (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

— to economictimes.indiatimes.com

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