Why should you opt for autopay of your credit card bill? 8 key reasons explained | Mint

If you hold two or three credit cards then you will invariably have multiple credit card cycles to keep track of. Additionally, there could be a number of other payment deadlines such as a mobile bill, an internet bill and so on. Phew! Too much to remember, isn’t it? Amid tracking all these deadlines, one missed deadline to pay credit card bill may cost you dearly.

As you must be aware that the banks typically charge anywhere between 2 to 3 percent interest every month on unpaid amount along with late payment charges. To avoid paying these charges and interest, credit card users are recommended to set autopay of credit card bills on their internet banking.

Notably, setting up autopay offers a slew of advantages, thus ensuring that you maintain a good credit history and avoid unnecessary financial stress.

8 Key reasons for which you should consider autopay:

1. Avoid late payment: Banks levy high penalties for late payments. Autopay ensures bills are paid on time, avoiding these fees.

2. Credit score: Regularly clearing of bills helps keep credit score high. On the contrary, late payments can adversely impact your CIBIL score, making it harder to access loans or better credit card offers.

3. Save time & effort: When you set an auto-pay, you are not supposed to remember due dates or go through the hassle of manual payments every month.

4. Interest charges: If you miss a payment, not only are late fees added, but interest can accrue on the outstanding amount. You can avoid this scenario by setting auto-pay.

5. Minimum or full payment: Banks often allow you to choose between: full payment or minimum due. It is noteworthy that making minimum payment will help you maintain a good credit score, although interest will continue to accrue on the outstanding balance.

6. Financial discipline: By setting auto pay, you can ensure to keep your finances organised and reduce the risk of overspending or neglecting bills.

8. Boon for those using multiple cards: If you manage several credit cards, auto-pay prevents you from missing payments on any of them, which can otherwise be too difficult to keep track of.

Be aware of these considerations:

1. Sufficient bank balance: Ensure that there is a sufficient bank balance: If your account lacks funds, payments might bounce, leading to penalties. Set reminders to maintain adequate balance.

2. Review your statements: Even with auto-pay, check your monthly credit card statement for any discrepancies or unauthorised charges.

3. Payment settings: Periodically review and update your auto-pay preferences, especially if you shift from minimum to full payment mode.