Late payment charges on credit cards can have a significant impact on your finances, leading to additional expenses and potential credit score damage. Understanding these charges is crucial to avoid unnecessary financial strain. Explore the ins and outs of credit card late payment charges, including when they are applied, why you should avoid them, and specific examples from Bajaj Finserv RBL Bank and Bajaj Finserv DBS Bank credit cards.
When are the late payment charges applied?
Late payment charges are applied by the credit card issuers when cardholders fail to make at least the minimum payment by the due date specified on their credit card statement. The charges may vary depending on factors such as the outstanding balance, the credit card provider, and the terms of the card agreement.
What is the interest free period on your Credit Card?
The interest-free period on a credit card is the duration during which you can make purchases without incurring interest charges, provided you repay the full outstanding balance by the due date. Typically lasting between 20 to 50 days, this period starts from the date of your purchase and ends on the payment due date. If you clear your entire bill within this period, no interest is charged on your transactions. However, if you carry forward any balance, interest will be applied to the remaining amount, including new purchases, until the debt is fully paid off.
Here is why you should avoid late credit card payments.
- Damage to credit score: Late payments can negatively impact your credit score, making it difficult to access credit in the future.
- Accumulation of fees: Late payment charges can quickly add up, leading to increased debt and financial strain.
- Interest accrual: Late payments may result in the accrual of high-interest charges on the outstanding balance, further increasing the debt burden.
- Loss of benefits: Some credit card providers may revoke rewards or benefits for cardholders who consistently make late payments, diminishing the value of the card.
Bajaj Finserv RBL Bank credit card late payment charges
Below are the late payment fees on Bajaj Finserv RBL Bank credit card w.e.f May 15, 2023:
Bajaj Finserv RBL Bank credit card applies a 12.5% fee on the outstanding amount. In rupees, the minimum fee applied is Rs. 5 and the maximum is Rs. 1,300.
Bajaj Finserv DBS Bank credit card late payment charges
Below are the late payment fees on Bajaj Finserv DBS Bank credit card:
- No charge applied for the amount due up to Rs. 100.
- Rs. 99 is applied on payments due above Rs. 100 and up to Rs. 500.
- Rs. 499 is applied on payment due above Rs. 500 and up to Rs. 5,000.
- 10% charges are applied on the amount due above Rs. 5,000 (maximum Rs. 1,299).
Conclusion
Late payment charges on credit cards can have serious implications for your financial health. By understanding when these charges are applied, the potential consequences of late payments, you can take proactive steps to avoid them. Remember, timely payments are key to maintaining a healthy credit profile and financial stability.
