Credit Account Management for Newbies – What you need to know

Credit card account management is vitally important in this day and age. With tons of credit options to ease the process of purchasing, it is no surprise that most consumers jump at them and then fall into debt due to poor management. Fortunately, if you are reading this, you probably want to be smart with your finances and not make any blunders. If you are new to credit and online credit card bills, this is for you. 

What is a Credit Score?

Your credit score is a three-digit numeric that tells the lender how likely you are to repay the credit they give you. Your credit score ranges from 300 to 850 and is determined by your credit history. If you have a track record of borrowing money and making timely repayments, you get a higher credit score which increases your chances of getting better deals on credit cards with a ton of benefits. 

What benefits can you expect to get by having a good credit score?

If you manage to spruce up your credit history and build your credit score, here are a few benefits you can expect: 

Higher chances of getting your loan or credit approved

If you put in the effort to build your credit score, you can boost your chances of getting better deals on credit cards and loans. Most borrowers tend to have a below-average credit history and generally avoid new credit cards and loans due to rejection. While there’s no guarantee that you will evade rejection, having a high credit score significantly reduces your chances of getting rejected. 

Credit lenders tend to consider a multitude of factors like income, loan debt, and so on. However, you can make up for a lack in other aspects if your credit history and scores are high. 

Reduced interest rates on credit cards and loans

Most people fall into debt due to their inability to repay their loan debts with interest. Having an above-average credit score can get you reduced interest rates on credit cards and loans, thereby making it easy for you to repay your loans and set aside more money for your expenses. 

Negotiation becomes easy

If you have a solid credit score, you stand a better chance of negotiating a lower interest on your credit card. You may present all the other options you have at your disposal as you negotiate. However, if you have slim pickings as a result of a poor credit score and history, you probably will not be able to negotiate nearly as much or as effectively. 

Get approved for higher credit limits

Your credit limit is the amount your lender allows you to borrow from them. Having an average credit score and history generally does not help you get reasonably high credit limits. However, once you build your credit score, you will be eligible to ask for higher credit limits. An increase in your credit limit can help you reduce your utilization ratio, which keeps your credit score up. 

What are the different ways to make credit card payments?

As you know by now, maintaining a high credit score is immensely useful. One way to do this is to make credit repayments on time. If your question is how to pay your credit card bill, here are a few ways you can do that: 

Use Visa or MasterCard

Visa and MasterCard are used at scale all over the world. Both websites offer you the provision to make credit card payments. To do this, you need to type your card details, credit amount, bank details, and your bank branch IFSC. If you do not know your IFSC, you can look it up or request customer service to help you. 

Through NEFT or RTGS 

You can use the National Electronic Funds Transfer System (NEFT) to send payments from your bank account to your credit card on the same day. Also, you may make your payments from any bank account you have. After you activate your online banking services, go to the ‘Funds Transfer’ option and select the NEFT payments option to make your payments. NEFT payments are usually credited within the same day if you make the payment before the cut-off time. 

Real-Time Gross Settlement (RTGS) is another option you should consider using. It allows you to transfer funds to your credit card on the same day if you make your payments ahead of time. RTGS works best if you want to make bigger payments. RTGS is perfect if you want to make large credit card payments to make sure you clear your balance on time. 

Through mobile apps

In this tech-driven world, do not be surprised if you find an application for everything, including credit payment. Just about every card company and bank have mobile apps to help you clear your balances. After you link your bank account to your mobile app, you can expect the app to send funds to your credit card. For every transaction that you carry out, you will have to enter an OTP on your phone to verify the authenticity and security of the transactions. However, you cannot use UPI apps and mobile wallets to take care of credit bills. 

Using Cheques

Cheque payments are the most straightforward way to pay credit bills. If you are using a cheque to make your payment, be sure to write the card number under the payee name, along with the payment amount, date, and your signature. Cheque payments are known to take two or three business days to get processed. It is advisable to make cheque payments ahead of time to avoid getting charged interest or any other fees that may apply. 

ECS Payments

The Electronic Clearance System (ECS) is another option at your disposal. It works very well if you use your credit card to pay specific bills consistently. If that is the case, you probably already know how much you are liable to pay, and you can fix an ECS mandate and ask the credit card company to send an ECS payment request to your bank. The bank can verify this and then make the transfer from your account to your credit card company.

Conclusion

There you have it – a simple, accessible guide to the basics of credit to give you an idea of what to expect as you venture into the world of credit cards. You probably know some of the benefits you can receive by having a high credit score. If you have a credit score, make sure you do your research and consider a multitude of factors before you pick a credit card that you think suits your fancy. Furthermore, you should refrain from splurging on unnecessary purchases. Spending recklessly and making late payments will damage your credit score.