Credit cards are debt-based financial tools. The card issuer offers a certain amount of credit to the user to utilise for transactions or purchases via a plastic card. The user is liable to repay the credit and they can do so without incurring any interest if they make the credit card payments before the applicable due date.
Automatic payment modes play a significant role in helping users pay their credit card dues before time and avoid interest charges. It is vital for a credit card user to understand the usage of such automated payment modes to best utilise their cards.
Automatic credit card payment methods
- ECS payment
Financial Institutions provide credit cardholders with ECS or Electronic Clearing Service which can auto-pay the outstanding credit card bill each month. You can avail an ECS payment system by following these steps –
- Download the ECS application form from the online website of your credit card Users who are not tech-savvy can collect it from the nearest branch of their card issuer.
- Fill it up with your account details as required; most importantly, the maximum amount that will be debited each month to pay your credit bill via ECS.
- Submit the form and obtain the ECS certificate authorised by your financial institution.
Following successful registration of ECS, the auto-debit facility will activate from the upcoming month, i.e. the next credit card payment due date. You can also alter the validity period of the ECS as per your wish.
ECS can save you from attracting interest rates, fines, or other penalties on your credit cards. Failing to repay your card dues in time will negatively affect your credit score. If you have a poor credit history, opting for an ECS regime will help in paying the outstanding bills of your credit card before the due date and improve your credit score.
- NACH facility
The National automated clearing house or NACH, implemented by NPCI, is a form of electronic payment by means of which individuals can enable automatic credit card payments.
In order to avail the benefits of NACH, you need to undergo a specific registration process –
- Find out if your financial institution is eligible for the NACH facility.
- Acquire the NACH registration form after visiting the official website of NPCI.
- Provide accurate account details and personal information as requested.
- You can opt for a payment option among the following which is the most suited to your financial condition –
- The total outstanding on your credit card bill.
- A minimum amount.
- A fixed amount irrespective of the above options.
For a certain month, a situation may arise when the outstanding credit card bill exceeds the maximum fixed amount set by the user. In that case, the user has to pay the remaining dues by other means of credit card payment.
- Submit the application form along with a cancelled cheque to your financial institution.
Following the above mentioned steps, an individual can deal with his or her credit payment by using NACH facility. The NPCI has a strict verification policy; the NACH registration process may take 10-15 days.
Online payment of credit card bills is the most convenient way to meet monthly credit card statements. If you have a savings account registered with your credit card issuer, you can use net-banking to set up the automatic payment facility on your credit card bills easily.
To activate net-banking, you need to contact your financial institution. After acquiring your login details, you can set up the ‘standing instructions’ with your financial institution on their website to enable the auto-debit feature. The financial institution will automatically debit the funds from your savings account, on a given date, for your monthly credit card payments.
Automatic payments for your credit card bills remove all your worries about the due date and let you enjoy several benefits of a credit card. Avail the Bajaj Finserv RBL Bank SuperCard which provides multiple benefits such as interest-free cash withdrawal, emergency loans, etc.
So, keeping these points in mind, you can avail the auto-debit facility for your credit card payment. Plan your finances properly to always have substantial funds available in your savings account/s for these automated payments to work successfully and avoid interest rates or other charges on credit cards with ease.Tags: benefits of a credit card