Tuesday, March 31, 2015

Know your credit card better: Charges you probably do not know

The lure of a credit card is hard to keep away from, especially when a sales representative from a bank or a retail outlet makes a convincing pitch about you getting a "free" credit card. But did you know that the credit card you are being promised is anything but free?
What sales representatives of credit cards do not tell you is that there are a whole host of charges that are applicable to them. Here are the various charges on credit card, you should know about before you agree to apply for one.
The annual maintenance fee:
When you are told you are being given a free credit card, it probably means that the joining fee and the annual fee has been waived off for a maximum period of one year from the date of issuance, but after this initial period the annual maintenance fee is applicable to your card. This could range from Rs 1500-3000 in a year.
Interest costs:
If you do not pay the whole of the outstanding amount within the due date stipulated by the bank each month, an interest rate on the expenses incurred on your card is charged at the rate of 3% per month. While this may not seem exorbitant to you, what sales representatives do not tell you upfront is that the monthly interest rate is annualized to arrive at an  annualized percentage rate (APR) which can be as high as 36-38%.
Overseas transaction cost:
Your bank will also charge you for every overseas transaction you make. This is usually 3.5% of the overseas transaction and is converted to INR depending upon the exchange rate on the day you make the transaction.
Cash withdrawal on credit card:
The transaction charges on cash withdrawal are as high as 2.5% of the cash advance. Over and above this you need to pay an interest on the cash right from day one, and this interest cost ranges from 24-46% per annum.
Cost for crossing card limit:
Even if you cross your credit card limit by Rs 1, you bank will charge you a minimum over limit fee of Rs 500 or 2.5% of the over limit amount, whichever is higher.
Late payment fee:
The Reserve Bank of India has recently come out with the diktat that banks must revisit the late payment charges on overdue amounts on credit cards. While this may relieve the burden of the card user by a tad, penalties are still applicable. Therefore, if you turn delinquent and do not pay your minimum amount due for more than 90 days you will be charged a late fee by your bank. For amounts between Rs 500 to Rs 20,000 the amount will be in the range of Rs 100-600 while for amounts over Rs 20,000 the amount will be in the range of Rs 700-800.
A duplicate statement fee:
While the monthly statements are delivered free of cost to your postal address, if you request for a duplicate statement fee, your card issuer will levy a duplicate statement fee which may range between Rs 50-100.
Card replacement fee:
If you lose your card, your bank will charge you a card replacement fee. This can be between Rs 250-300.
Cheque bounce or dishonour of ECS charge:
If the payment on your credit card bounces, your bank will charge you a fixed rate for the same which can be between Rs 300-350. If the bank sends a representative to pick up cheque or cash on the overdue account, another fee of Rs 100 is added to your next month's statement.
If you purchase petrol using your credit card, a certain percentage of the transaction value is subject to either 2.5% of the transaction or flat fee of Rs 10-25 (whichever is higher) depending upon the bank. Some banks offer a waiver on the fuel surcharge but these are for certain specified bands say between Rs 400-4000. Therefore any transaction below Rs 399 or over 4000 will continue to be charged as usual.
Service tax:
Up until now, the service tax levied on service charges was 12.36%. However, while presenting the budget for the year 2015-16, the Finance Minister Arun Jaitley announced that the service tax will be hiked to 14%. This means your credit card transactions will now become costlier as well.
Thus as you can see, the credit card you are being offered is not free at all and most of the charges you are not even told upfront. Knowing about these various fees and charges will put you in good stead and help you use your card prudently. Make sure you go through the issuer's 'Most Important Terms and Conditions' (MITC) before you apply for the card. Prudent use of your credit card will also help you keep your Cibil score intact and keep your overall financial health in order. 

Tuesday, March 24, 2015

Worried about your low Cibil score? Here's how to take it above 750

Your Cibil score may just be a three digit number, but there is no undermining its importance when it comes to the assessment of how creditworthy you are. With a poor Cibil score, you will not be able to access credit when you really need it and your dream of being a homeowner, car owner or even getting a personal loan when you are in urgent need of one, may be squashed. If you are worried about a low Cibil score, here's what you can do to improve it.
If your credit history is not up to the mark for some of your actions in the past, and your Cibil score has dwindled as a result, you have to be proactive in rectifying it, so that it does not impact your financial health further. So here are some steps that will put you on the right path of rectifying your Cibil score.
Keep an open mind
First up admit that there has been a faux pas with the way you have handled your money, and that is what has brought your Cibil score down in the first place. Be prepared to understand and accept your mistakes and have the right attitude to go about with corrective action.
Find out where you stand
Now that you have admitted the problem, it's time to access your Cibil score and yourreport. Remember, it is not handed out free of cost and you must apply for it on the Cibil website by filling out an online application, submitting your KYC documents and paying a fee of Rs 470. You will have to go through an online authentication process.  If you complete this successfully your Cibil score and report will be mailed to you and you can download it immediately. (For more information on the purchase of your Cibil score visit https://www.cibil.com/faq/purchase-post-purchase-help#t158n384)
Find out where you went wrong
Your Cibil report  is not like the report card you received at your school and will not list out your mistakes. You will therefore have to learn how to read your Cibil report  and find out why your Cibil score is low. Your credit report contains all your account information including all your bank accounts, loans and credit cards. Assuming that the rest of the information is correct, pertaining to your identity and the status of your accounts, look out for your DPD or days past due in every credit card or loan that you have availed. DPD indicates how many days a payment is due on the account in that particular month.  Anything more than "000"is viewed as negative and brings down your Cibil score. Also check for 'Written-off' or 'Settled' flags. These flags are a clear indication of default in the past and could be the primary reason for a low score.
In case of an error
Your bank gives information about your loan account or credit card to Cibil and some times there may be discrepancies in this reporting process. These errors may be responsible for bringing down your Cibil score. Sometimes you may find errors such as an inaccurate account balance, an overdue amount when a loan repayment has been made, or a loan account that  has been  closed from your end but does not reflect on your Cibil report.
In such cases, you need to raise a dispute on the Cibil website by using their dispute request form. Your dispute is then passed through the dispute resolution cell of Cibil and taken up with the credit institution pertaining to that particular loan account. Your dispute takes approximately 30 days to get resolved. There may also be serious errors such as ownership of a loan, where you may find details of a loan on your Cibil report that you may not have availed of at all. This may be a case of identity theft. In such a case write to Cibil immediately and Cibil will look into the matter on a priority basis.
Make a plan and stick to it
Once you have identified what the problem is, make a plan on how to improve your score assuming that your Cibil report is error free. If you need to pay off unpaid debts,outstanding amounts or even settled amounts, think about the best way that you can repay them. Without repaying these amounts, your score might not go in the right direction only with good behavior on your new accounts. In the you're your score improves without doing much with the old accounts, don't feel too happy about it! Lenders will notice the negative flags on your report while evaluating you for new credit and might deny you new loans.
Talk to the lenders you have defaulted with in the past and try to work out a strategy in which you can repay those amounts. We do not say its is easy! You will have to be disciplined about your other expenses and cut corners somewhere, but be determined and patient and stick to your plan and over time you will have a clean Cibil report and will result in an improved Cibil score. A good Cibil score is an obvious indication of good financial health and will prove to be beneficial in the long run.
The post rectification plan
Once your Cibil score has been rectified, make a resolution to keep balances on your credit card low, and make timely repayments on loans and credit card bills.  Also maintain a healthy mix of secured and unsecured credit and apply for new loans or credit cards after much thought and consideration. These prudent financial practices will keep your Cibil score intact and help you access credit easily when you really need it.
Your Cibil score is not something that is etched in stone, and corrective measures can help you bring it back to a satisfactory level of 750 and above (over 900). It is imperative that you maintain a good Cibil score always. It is not just a reflection of your credit worthiness that lenders will access when you apply for some new credit, but may also be accessed by a potential employer when you are seeking a job. So make sure your Cibil score is in order and if it is not, take corrective action immediately.
- See more at: http://creditvidya.com/credit-score/worried-about-your-low-cibil-score-here-is-how-to-take-it-above-750-cs163.aspx?utm_source=SP+-+CC&utm_campaign=c49c48563d-ScoreUp_12_CC3_24_2015&utm_medium=email&utm_term=0_6373e64bcf-c49c48563d-275301573#sthash.MzYXQx5a.dpuf

5 factors to consider while choosing your home loan lender.

Loans are a big business for a bank, but not such a happy thing for an end consumer. But it is the most dependable form of funding source while buying a house in today's world. In an effort to meet our financing requirements, it is important to understand that we should not rush into finalizing our home loan lender as this relationship with your bank might last for more than a decade. To ensure that you have a good track record of repayment, it is imperative to know the terms and conditions under which you will be taking a loan.
When you apply for a loan, the builders and loan agents will try to hurry up things. It is but obvious they do it, as it is a source of income for them. But do not yield to these pressures. Do your own homework, read every bit of info available on home loan lenders. Go shopping for a loan that provides favourable terms and conditions.
Do not fall into a trap like Ragini Kadam did. She just chose a lender in hurry and realized that she had to bear the brunt of a host of hidden charges. We have put together her experience to highlight the importance of knowing your loan and lender well before you sign on the dotted line.
She is a Bangalore-based techie who just chose the bank with a very smart salesman while taking a home loan. She did not go hunting for a home loan and did not realise a whole host of hidden charges and higher interest rate, which she had to bear while being granted a loan.
"When I took this loan, I was given a sanction letter in 15 days from a private bank. If I had waited a little longer and opted for a public sector bank I would have saved a lot in terms of foreclosure charges and interest rates. But I was in a tearing hurry. The excitement to buy the house quickly and the persuasive salesman made me chose this bank," opines Kadam.
To help you understand the process of borrowing, we list the following important factors to consider:
Choose a well-known Lender: Every bank or housing finance corporation (HFC) has its own method of screening process when it comes to granting a home loan. While some of them process it quickly, the others take their own time. Just because a few lenders take some time to process your loan application does not mean that the home loan comes to you with a raw deal. In many cases, such banks provide exceptional services to the customers. So it is very important to opt for a reliable lender.
Loan approval process: Some banks take a couple of weeks to process your loan application while others may take up to a couple of months. You should understand that private sector banks like HDFC, Kotak, Axis Bank, ICICI Bank, and MNCs like Standard Chartered Bank, HSBC and others do it faster than public sector banks. While the public sector bank may have lesser processing fee, they may take up to three months for disbursal in some cases. Many of customers also prefer a bank with good internet banking facilities. So, every bank has its own pros and cons. You need to choose the one that suits your requirements.
Eligibility: Your eligibility is decided after you submit your duly filled loan application form along with documents required to process the loan. Lenders will need your bank statement reflecting the transactions for the last six months, income proof in the form salary slip and form 16 for the last three years, copy of you PAN card, age proof and address proof.  After you submit the documents, the bank will do due diligence process by pulling out your Cibil credit score to check your credit history.
Loan repayment: We strongly advice you to read the entire loan document to understand the terms and conditions well before you take on the loan. Please read the settlement and foreclosure clauses in detail, because these are the areas where many of the customers end up feeling that they are being overcharged.
Borrowing costs: Taking a home loan means incurring a few expenses to get the loan. It includes the following:
  1. Processing fees
  2. Service tax
  3. Franking charges that are applicable for registering the loan document
  4. Interest as applicable. It could be fixed or floating. We strongly advice you to calculate your costs in actual terms and not fall for percentage games
  5. Prepayment and foreclosure charges: Please note that Reserve Bank of India has banned these charges on home loan. So if there is any bank charging them, you need to talk to your bank about it.
Weigh in all these options before you choose your lender, as mentioned before, it is going to be a long-term relationship that you will be having with your lender. If you do this much of back grounding before you sign on the dotted line, your loan repayment years will be a peaceful course.
- See more at: http://creditvidya.com/loans/home-loan/5-factors-to-consider-while-choosing-your-home-loan-lender-hl147.aspx?utm_source=SP+-+CC&utm_campaign=c49c48563d-ScoreUp_12_CC3_24_2015&utm_medium=email&utm_term=0_6373e64bcf-c49c48563d-275301573#sthash.lo6xQ0pA.dpuf

8 tips to plan a vacation that doesn't hurt your pocket!

Summer holidays are round the corner and this is the perfect time to plan a family vacation. Planning a holiday is not only a stress buster for the entire family to tide over exam stress but also a very effective way to save money while enjoying. Yes, planning is the key to having a fun vacation while saving more of course.
Many a times, the thought of vacations brings to our mind additional expenses. Instead, when planned effectively one can actually save up for travelling. This approach will ensure that there is no undue financial stretch. The surprise element when it comes to expensive last minute bookings or other such expenses is out. This reduces considerable stress and one can return from a vacation relaxed and rejuvenated. Here are a few tips which will help you plan effectively and look forward to the vacation.
#1 Planning must begin months ahead
 With so many holiday offers and hotel booking advertisements flashing online and on television one can easily get baffled while making a choice. Once the destination is finalized half the work is done. The approximate cost can be worked out and budgets can be planned accordingly. This approach helps in focusing on minimizing travel costs without getting distracted cause of pop up offers on different destinations.
#2 Saving up for the vacation
Having planned a destination with an approximate budget helps in calculating the money to be set aside every month to add up to the total amount until the vacation month. This money can be invested in a recurring fixed deposit or set aside in comparatively high yielding savings account. The excitement and money stack up simultaneously until your vacation day!
#3 Use credit cards smartly
The temptation to swipe credit cards while on a holiday is difficult to resist. Saving for your vacation is a good way to earn interest instead of paying interest on vacation expenses. The wise thing to do is use the credit card during the vacation and pay off the entire credit card balance from the saved money, once back. That way one can benefit from reward points and cash back offers while earning interest.
#4 Lookout for offers and discounts
Subscribe to travel websites to be updated for available offers and discounts. Many a times during the off seasons, offers are rolled out. Even better deals can be negotiated by getting all the bookings done through one website. So shop around and track offers for a while, see what suits you and go in for the best available deal. Do not forget to ask for discounts on entertainment and activities if you are willing to book in advance.
#5 Experienced travelers know the best
Speak to your friends and family who have travelled to the destination before. They are the best people to guide you on exclusive stay and travel tips. Again it's not only about saving but finding the best value for money. Tips from travelers are invaluable in that case. Spending some extra bucks for a good deal is worth the time you will be spending there.
#6 Visit the website before visiting the place
Now this is a good practice not only for getting information beforehand but also for saving up. Many places offer exclusive coupons on their websites which can be used on the spot to avail discounts. Checking the website before also helps one know about the days when the place is closed or about special days when visits can be avoided since it would be crowded. 
#7 Travel light on the flight
Efficient and planned packing is the key to travelling light. Also, roll your clothes so that they occupy least space and carry outfits which can be mixed and matched to create new looks. Airlines charge extra for additional baggage and those charges can easily be avoided. Do remember to save some space in the bag to be filled with goodies on your way back home. All of that must be planned in a way, so as not to exceed the weight limits.
#8 Find more about member perks
Whether it is the credit/debit cards, clubs or website subscriptions, members have access to privileges. Look out for the ones applicable to you beforehand. After all, let all the plastic cards and endless newsletters you receive work in your favor.
Life is all about collecting experiences and creating moments. Travel provides us an opportunity to do that. So start saving now, use these tips and book your next vacation! After all- to travel is to live.
- See more at: http://creditvidya.com/credit-basics/8-tips-to-plan-a-vacation-that-doesnt-hurt-your-pocket-cb188.aspx?utm_source=SP+-+CC&utm_campaign=c49c48563d-ScoreUp_12_CC3_24_2015&utm_medium=email&utm_term=0_6373e64bcf-c49c48563d-275301573#sthash.66Aqfaxb.dpuf

Tuesday, March 10, 2015

How to Choose the Right Monitor for Web Design

Having the right equipment can make working on a web design project delightful or downright miserable. This is especially true when it comes to choosing the right computer monitor. (You are going to be looking at that screen for hours on end, after all.)
So how do you find and purchase the best monitor for your design project? The answer might not be as simple as you think. You will want to base what monitor you buy on the type of computer you use (desktop vs. laptop), size and scope of project and personal preference.
But we can give you some ideas of things to look for and tips for finding the perfect monitor for web design projects.

Desktop vs. Laptop

Desktop vs. Laptop
First, you have a decision to make. Are you a desktop designer or laptop designer? A lot of this may depend on how and where you work. From an office, from home, on the go?
If the answer is a laptop, there are a lot of factors in addition to monitor specifications that you will want to think about. (All of these elements will impact how you use and work on that laptop monitor.)
  • Battery life
  • Connectivity
  • Keyboard size
  • Mouse vs. pen vs. touch controls
  • Portability
  • Screen size (laptop size)
Now that we have the whole desktop or laptop thing covered, let’s really start to think about monitors. And in particular, big desktop monitors.

How Big Do You Go?

iMac Retina
Let’s be honest: We all judge other designers by the size of the monitor on the desk. And bigger is definitely better. (You want so see every tiny detail, right?)
But there are more considerations to what size monitor is the right fit depending on the type of work you specialize in. Think of it this way, if you are designing games that will primarily be played on tablets, you might want a smaller screen that mirrors a tablet size to use for some design and testing aspects of your work.
Most designers though opt for monitors that are somewhere in the 24- to 27-plus-inch range. (Remember monitors are measured diagonally.) The 27-inch monitor is popular because it offers a great viewing area, will fit in most workstations and is rather affordable.

Consider Resolution

The resolution – or number of pixels a monitor can display – is an important factor in the monitor-buying process. The higher the resolution, the better the detail.
Monitor Resolution
This is something that is getting even more important every day with more end users buying devices with retina displays. Some of the most popular devices on the market feature more pixels than HD TVs right now.
Resolution is measured in horizontal (width) pixels by vertical pixels (height). Shaun Anderson for Hobo Internet Marketing keeps a frequently updated list of the best screen resolutions for designing websites. The most popular size today is 1,366 by 768.

Pick a Panel

Wacom Monitor
All monitors are not the same in the way they are constructed. Most types fall into four categories and can vary drastically in price and overall performance.
  • Twisted nematic panels (TN): This is the most common style of monitor – and least expensive. If you are not sure what you have, this is probably it. This monitor is fast and has a quick refresh rate but is not as accurate when it comes to rendering color and can have some distortions.
  • Vertical alignment panels (VA): This is one of the toughest monitor types to find. It falls in the middle of the pack in terms of price and has better color rendering than TN models.
  • In-plane switching panels (IPS): If color is your thing, this is the monitor for you. The accuracy is wonderful from almost all angels, although these models have a slower refresh rate (primarily a concern for gamers). This is a fairly expensive option by one many designers opt for.
  • Plane-line switching panels (PLS): This model is much like a IPS monitor, with more calibration and features. It is the priciest options available.

Color and Gamut

Color and color correction are two elements that mean a lot to designers when it comes to picking the right monitor. You’ll want to make sure the monitor you choose has color correction and calibration capabilities.
Consider the gray gradient – higher quality is noted when shades of gray or other colors can fade easily across the screen without color breaks. How this works can get a little technical but has to do with the response of the RGB signal from the graphics card to the monitor itself. Some processes include to deterioration of that signal; others do not. Look for monitors with higher LUT numbers for better color quality.
When it comes to calibration of color, you will likely invest in an add-on bit of software to do this. There are plenty of options on the market that you will buy after you actually decide on a monitor. What you will really need to think about when you are making the monitor purchase is the quality of the graphics card. (It’s worth the money to get a monitor with a high-end graphics display.)
Color anf Gamut
The other color consideration in terms of monitor selection is gamut – the complete range of viewable color available on the device. Honestly, this is less of a concern than many people make it out to be, unless your focus is on photography or printed design projects. The reality is this: No matter how great the color is on your end, it will display based on the equipment of the user. Most displays, including Apple and Windows operating systems – are made to be sRGB compliant. (For more on gamut settings and color correction, you can read this tutorial.)

Think About Your Workspace

In addition to the monitor itself, you should think about where you are actually placing it before you make the purchase. There are a few key questions you should ask yourself to help find a model that will work from where you are working.
  • Will it fit in my workspace or on my desk?
  • What type of stand is necessary? Does it need to swivel?
  • Are there lights or windows that will cause a glare?
  • Will it connect to my current equipment?
Go through the checklist and determine what features are most important to you. (Personally, I always opt for an anti-glare coating and swivel base. These things make it easier to show work to others.)
Consider the impact of others looking at the screen when thinking about these elements. Dark workspaces don’t require anti-glare coating, for example, which can dull down information on the screen.
Connectors and plugs are another pretty important consideration. Make sure you have everything you need to actually plug your new monitor into existing equipment. (One of the things that I always look for is USB ports on the monitor; it’s a feature that I absolutely love and have gotten extremely used to.)

Look at Special Features

Be honest, will you actually use all those fun features or not? When looking at what a monitor can and can’t do, stick to what you will find useful.
Add-ons such as touch screens and webcams can drive up the price quickly, but if you aren’t going to use these tools, it is a waste of resources. Other features that often sound cool but are unnecessary when it comes to graphic design monitors include built-in speakers, TV tuner and super-fast response times.
Monitor Calibration
The most important special feature for designers should include accurate color calibration. You want to make sure what you are seeing on your screen is exactly what will come across for others.

Plan a Budget and Stick to It

Finally, you need to think about budget. When you are looking for the perfect computer monitor for web design projects, it can be easy to want everything. But you have to be realistic. How much money can you actually spend?
A nice, high-end monitor is not cheap. Models can range anywhere from $500 for smaller sizes to upward of $3,000 for larger (think 32-plus inches) displays. Set a budget before you start shopping so you know what you can and can’t have.
If the budget is tight, instead of one pricey monitor consider a primary monitor and a second smaller monitor for other things, such as checking email or social media.


There’s a lot to think about when selecting the perfect computer monitor as a web designer. Think about how you work and what features you can’t live without before you even look at the first model. Set a budget and stick to it.
Then go shopping. There are a lot of fun tools out there. What type of monitor do you prefer? Why? Share your favorites with us in the comments.

How to Interpret Your CIBIL Credit Report?

This article explains the information in your CIBIL report. CIBIL report not only includes your demographic and identity information but also contains the details about all the loans that you have availed from different banks.
This article explains your CIBIL credit report in a chronological order:
Section 1 :  Report Header Information
On the top left hand side:
  1. Consumer name
  2. Member ID
  3. Member Reference number
 On the top right hand side:
  1. Date
  2. Time
  3. Control number. This is a nine-digit number that will be used in all further communication.
Section 2:  Consumer/Borrower Information
This has the all the information on the consumer, i.e. You.
  1. Name
  2. Date of birth
  3. Gender
  4. Telephone numbers
  5. Identification (Income tax ID, passport no, Voter ID)
  6. Addresses. The last known four addresses of the consumers are given here. This has a date reported section as well. The date reported is the date when the address was reported.
Section 3:  Summary 
This is a brief summary of the number of account types, number of accounts, advances, balances and the dates on which the accounts were opened.
Under Accounts there are four sub-sections:
  1. Accounts: This shows the total number of accounts that you have. It also has details on the number of accounts with overdue balances and the number of accounts with zero-balance.
  2. Advances: For credit cards, it shows the maximum amount of money (highest bill) that has been swiped on a card. For other loans, it's the sanctioned loan amount.
  3. Balances: The amount that is still due to the bank/credit card company/lending institution. It also shows the amount that is overdue.
  4. Date Opened: The date for which the most recent was established as well as the date for the oldest account.
This is a summary of the kind of enquiries, number of enquiries, and the dates on which the enquiries were made.
Section 4: Details
This section contains detailed reports on all the accounts and enquiries.
These are the following sub-sections under accounts:
Account: This contains the following:
  1. Name of the member (lending institution).
  2. Account number
  3. Type of account (auto loan, home loan, education loan etc.)
  4. Ownership (individual, guarantor or joint)
  1. Date opened
  2. Last payment (date the last payment was made)
  3. Date the account was closed
  4. Date the closing was reported
  1. Amount sanctioned/highest billing
  2. Current balance
  3. Amount overdue
The option include suit filed, wilful default, written off etc.
Days Past Due:
Number of days since the last payment has been due. It functions from left to right.
It shows the number of days that you have been late on your payment. The most recent month will be the first entry. For example if you haven't paid your EMI for your auto loan for five months, the entry will be as follows:

DPD                            150      120      90        60        30        00        00       
Payment date              06-12   05-12   04-12   03-12   02-12   01-12   12-11
This means on June 2012, you hadn't paid your EMIs for five months or 150 days. You started defaulting in February 2012 and haven't stopped since.

Minimum Payment Amount On A Credit Card Is A Debt Trap

Most people do not understand how minimum payments are calculated on credit cards and thus end up paying much more interest than they should to the card issuers. Here's what you need to know about how the minimum payment due on your card and how it can wreak havoc on your finances if you are not careful.

How do lenders calculate minimum balance?  Credit card companies have different standards for calculating the minimum amount due, but largely the industry standard remains 5 % of the total account balance plus interest. You opt for the minimum amount because it seems like a lesser burden each month, but what you do not realise that you are making a far bigger interest payment to your issuer. Let's understand with an example. Miss. XYZ has an outstanding of Rs 50,000 on her credit card. Since she has opted to make the minimum payment of Rs 2500 per month and her card company is charging an annualised interest 36 per cent on it! This means it will take her 31 months to pay off her entire dues. And by the time she will have made the last payment, she will have paid the card issuer Rs 77,500.
You automatically miss your grace period:  A grace period is the number of days you have in hand to pay your dues after your monthly billing (21 days usually). So effectively you have 30 days (your billing cycle)+21 days of grace period meaning a total of 51 days to pay off your bill. But this will only work in your favour if you are paying off your total outstanding. If you are opting for the minimum 5 % payment, the 95 % remaining will be automatically rolled over to the next billing cycle, and you will not have the option of a grace period at all. Lastly, getting into a minimum payment due cycle will affect your Cibil score negatively as you will perpetually have a high utilization on your credit card. A bad Cibil score may hamper your chances of getting a future loan.
Thus, the wise thing to do is clear off all your outstanding dues on your credit card all at once. If you do not have the money to do it ask for a loan from family or friends, skimp on your expenses or even take a personal loan to get over this financial jeopardy! If you keep ignoring this crucial aspect of your finances you may find yourself falling into a pit of debt that is endless.