Meaning of credit card billing cycle- the time between Billings for the payment of the credit card it’s called credit card billing cycle/ Credit Card Cycle. There is always be a due date mentioned by the insurer to clear your card payments. The penalty is to be paid if the cardholder makes late payments after the credit card billing cycle has generated the bills. The cardholder gets this every month and the billing cycle ranges from 28 to 31 days.
Working Of Credit Card Billing Cycle
There are many credit cards in the market issued by financial companies or banks. According to federal law, cycle billing doesn’t have to be consistent. It means that one can always go to the bank and ask to change the billing cycle dates. For example, your credit card payment has to be made by the 5th of every month but you receive your salary by the 7th of every month. This means that you are unable to make the payments of the credit card by the 5th. Instead of the 5th, you are willing to make the payments by the 7th of every month. Then you can simply ask the credit card issuer to change your billing cycle dates and make the due dates by the 8th or any other date after the 7th of every month. One thing which is very important to note is that the new set billing cycle dates cannot vary more than four days from the originally set billing cycle. Let’s discuss the credit card minimum balance and credit card cycle in detail.
Online Credit Card Statement
Payments, miscellaneous charges, total account balance, rate of interest, outstanding balance, minimum payment due, credit card minimum balance, statement balance, and due date altogether make an Online Credit card statement. One can always check the billing cycle, statement, due dates, etc. with the help of their online account. An online credit card statement is generated every month which is easily accessible by the consumer on their online account. A habit of checking and monitoring your billing statement will save you from any unauthorized charges. CFPB (Consumer Financial Protection Bureau) has made some laws to protect customers or consumers from any kind of theft on their credit cards.
One such law that protects you from the urgency of the payments is that the due date on your credit card is about 21 to 25 days after your billing cycle ends. That means CFPB gives you grace. So that you are comfortable making the payments on your credit card.
Longevity Of a Credit Card Billing Cycle or cycle billing
The number of days between the last Statement date and the current statement date determines how long the credit card billing cycle is. every issuer of the credit card wants you to live long dreams, and pay to discover while always keeping the credit in your pocket. By reviewing your credit card agreement and credit card statement, you can easily check the longevity of your credit card billing. Cycle or cycle billing
Minimum Due Date
After the mentioned due date, there will always be a rate of interest on your statement that you were supposed to pay to ask penalty for late payment If at all you were not able to make payments on your credit card even after the great.; the issuer of the credit card will report your account to 3 biggest credit bureaus. Equifax, Experian, or TransUnion will check your account details, statement. They then work for managing your account by making sure that you at least pay a minimum amount or credit card minimum balance to settle the build on your card. This may hamper your CIBIL score.
Therefore, a small amount does which is also called the minimum amount due to MAD it’s decided by your credit card issuer. The minimum amount due it’s nothing but 5% of the total outstanding amount on your credit card bill. If you can pay MAD every month; You will not be charged with any penalties like late fees.
Your credit card issuer will report your purchases to the Credit Bureau after every 30 to 45 days. Any Missed payment leaves negativity on your credit score. Hence, paying even the minimum amount due is important by the minimum due date.
Credit card fees
There are main 7 types of credit card charges that you must know. Let’s have a look at these credit card charges in detail:
|Annual Maintenance charges
|Annual charges need to be paid yearly. The fees vary according to credit cards and banks.
|Cash Advance fees
|Cash advance fees are about 2.5% of the amount withdrawn.
|If you assign more than the limit of your Credit card, you need to pay these charges. A minimum of Rs 500 is charged.
|Late Payment fees
|The late fees vary from bank to bank and range from Rs.100 to Rs. 750
|Interest Rate (APR)
|APR is generally high in credit cards ranging from 33% to 42% annually.
|18% GST is paid on EMI
|Foreign Currency Mark-up fees
|The amount is charged as the percentage of the transaction amount of around 2% to 3.5%.
FAQs Credit Card Billing Cycle
Q1. What do you mean by Credit Card Billing Cycle/ Credit Card Cycle?
A1. The time between Billing sessions of the credit card is called Credit Card Billing Cycle.
Q2. What is an Online Credit Card Statement?
A2. Payments, miscellaneous charges, total account balance, rate of interest, outstanding balance, credit card minimum balance, minimum payment due, statement balance, and due date altogether on your online banking app are called Online Credit Card Statement.
Q3. What is the cycle billing/ Credit card billing cycle?
A3. Cycle billing / Credit card billing cycle is the number of days between the last Statement date and the current statement generated.
Q4. Please explain the Minimum Due Date?
A4. The minimum amount that a person can pay for the outstanding amount on the credit card statement; on or before the payment due date is called the minimum due date.
Q5. Why do we even need a credit card?
A5. In the recovering Recession economy, Crédit card helps in providing a better lifestyle by making sure you are not burdened.
Q6. What is a credit card cycle?
A6. The credit card cycle is the billing cycle or credit card billing cycle of a credit card approved by the issuer.
Q7. Why is it important to make the minimum amount due to payment?
A7. It is extremely important to make the minimum amount due; otherwise, it will impact a person’s CIBIL score and the issuer will give your account to credit bureaus like Equifax, Experian, or TransUnion. These bureaus then will keep a record of your account statement and will make sure to provide you leverage to make the minimum payment on a credit card. This might impact your ability to get your CIBIL score fixed for future investments.
Q8. When do we need to use a credit card?
A8. We can use a credit card for different billings like pay school or other institution fees, to make another credit card payment, etc.