What will happen with my next SBI credit card bill if I pay only the minimum due this month?
What will happen with my next SBI credit card bill if I pay only the minimum due this month?
Share
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
If you only pay the minimum amount due on your next SBI credit card bill, here’s what will happen:
1. Minimum Payment Due Your bill will indicate a minimum payment amount, usually equal to about five percent of your outstanding balance.
2. Interest Charges: Any remaining balance will accrue interest at an APR between 30-40% or higher.
3. Late Fees: If you miss your minimum payment date, late fees could apply ranging from Rs 100-Rs 500 or even higher, depending on the card and outstanding balance.
4. Credit Utilization Ratio: Carrying an increased balance can significantly increase your credit utilization ratio and harm your score over time.
5. Loss of Grace Period: Any new purchases might find themselves without their usual grace period of 20-30 days for interest-free transactions to accrue, meaning new transactions could begin accruing interest immediately instead.
6. Debt Difficulties: Making only minimum payments makes it more challenging to eliminate debt as most of each payment goes toward interest charges than principal.
Pay as much of what you can each month to reduce your balance and avoid expensive interest and fees. While meeting at least your minimum payment will save money over time, making more will yield even greater dividends.
Hey, so I know you’re wondering what happens if you only pay the minimum due on your SBI credit card this month. Here’s the deal:
Interest Keeps Adding Up:
When you pay just the minimum, the rest of your balance still racks up interest. SBI credit cards have high interest rates, and it compounds daily. This means the longer you carry a balance, the more you end up paying in interest over time.
Longer Repayment Period:
Paying only the minimum extends how long it will take to pay off your debt. What might take a few months to clear could turn into years.
Impact on Your Credit Score:
Maintaining a high balance affects your credit utilization ratio, which can lower your credit score. A lower credit score can make it harder to get loans or credit in the future.
What You Can Do Instead:
Pay More: Try to pay more than the minimum due to reduce the balance faster and cut down on interest.
Budget Better: Make a plan to allocate more money each month to pay off your credit card.
Consider Balance Transfers: If your balance is high, transferring it to a card with a lower interest rate can help.
Use EMIs: For big purchases, see if you can convert them into EMIs to manage payments better.
So, paying just the minimum might keep you from missing a payment, but it’s not the best way to manage your credit card debt. Aim to pay more whenever you can to stay on top of it.