Gone are the days when you had to accumulate money to buy something that you always wanted or wait for the bank to approve your loan. The general public has been gifted immense purchasing power in the form of credit cards. These credit cards have revolutionized the way you spend and have taught new ways of managing our finances. Major banks and other financial institutions offer credit cards to their customers and you get rewards for purchasing things with this credit card.

One of the major reasons why people often miss their credit card bill payment is because other chores take priority over going to the bank and paying the bill. The more you delay the credit card bill payment, the difficult it gets to streamline your credit habits. Therefore, almost all major banks allow you to pay credit card bills online. Online bill payments are easier, hassle-free, and less time-consuming, and that’s why more and more credit card owners are opting for online transactions.

There will be certain queries pertaining to online credit card payments. So, here are some of the things that you should be familiar with if you wish to pay your credit card bills online.

How does one pay a credit card bill online?
If you hold a credit card from the same bank you are an account holder, paying your credit card bill online becomes incredibly simple. All major banks provide online banking services and that’s where account holders conduct their online transactions. So, for instance, if you have a savings or checking account in Bank of America, you can pay your credit card bill through online banking. You will have to sign in to Bank of America’s online banking platform and select the “Bill Pay” tab. Then you have to follow the instructions provided in the “Pay to/Pay from” tab and complete the transaction.

If you wish to pay your credit card bill by using an account from another financial institution’s money market or checking account, you need to sign in to online banking and select the “Bill Pay” tab, then select, “Got to Bill Pay.” Once you are directed there, select the “Pay to/Pay from” and set up your credit card account on the “Pay” tab. For this procedure, you will need the bank’s 9-digit routing number and its account number.

How should one determine their monthly credit card payment?
Credit cards lend you purchasing power and in return, you are supposed to pay the credit card bill towards the end of the moment. While paying the bill, you have two options: either you can pay the balance back all at once or you can do it over time. So, when the time comes for you to pay your credit card bill online, you have to determine which is the best amount to send to your credit card issuer—whether it is a minimum payment, full balance, or something in between. You’ll have to put some serious thought in it while determining the amount.

Ideally, paying full balance is the right thing to do. If you pay the full balance every month, you will get certain benefits along with it. For instance, you can take advantage of your credit card’s grace period and thereby, avoid paying interest on the balance. Also, you will never have to deal with credit card debt.

Unless you own a charge card, the credit card issuer wouldn’t ask you to pay your balance in full every month. Instead, you can make smaller monthly payments every month until the entire balance is repaid in full.  If you pay a minimum on your credit card every month, you will definitely avoid a late fee marking on your card and an instance of late payment on your credit report.

In certain cases when the credit card holder cannot pay the entire amount in full or pay the least ideal amount, they can pay the amount they can afford at that point in time. It is essential to review your expenses and income and arrive at a realistic conclusion about how much you can pay without straining yourself.

What happens when one cannot pay the credit card bills on time?
Your credit card bill payment is considered to be late if it is received after the cutoff time on the due date, or if it is less than the minimum amount due. So, if you don’t pay your bills on time, there will be unfavorable repercussions of the same. They are as follows:

• You will be charged late fees
  When your next billing statement arrives, it will include a fee for the late/missed payments. Late fees range can range anywhere from $15 to $35, but it depends mostly on your credit card’s late fee policy and if it’s the first time you have defaulted in the past six months. In fact, you will be charged a late fee each month your payment is late or less than the minimum payment.
• The interest rate keeps increasing
  In case, the credit card payment has crossed 60 days from when it was due, creditors stop penalizing you with a late fee. Instead, they increase your interest rate to the penalty rate, which is the highest interest rate on the credit card. This higher rate of interest will increase your finance charges and this will make it more expensive to carry a balance, and inevitably extends the amount of time it takes to pay off your balance. However, if you make six months timely payments, the card issuer can give back your pre-penalty rate, but only for the previous balance. The purchases that are made after the penalty is levied will still be charged a higher rate of interest. Whether this is applicable or not depends largely on your credit card terms.
• The late payments appear on the credit report
  When you are over 30 days late in paying your credit card bill, an entry is added to your credit report. This instance of late payments stays on your credit report for the next seven years. Moreover, if you miss the next payment, the entry is updated to 60 days, and this keeps adding up every 30 days until your account is charged-off after 180 days.
• Your credit score declines
  Late credit card bill payment makes a lasting impact on your credit report. It is essential to understand that payment history makes up 35 percent of your credit score. So, if you keep paying credit card bills after their due dates, it will have a detrimental impact on your credit score. This creates a lot of hurdles as it affects your ability to get new credit in the future. Moreover, when you consider applying for a loan in the near future, the lenders would go through your credit report and poor credit scores can dissuade them from lending you money. Your credit score is a reflection of your financial habits, which is why a low credit score raises red flags pertaining to your ability to repay the loan.

As you are now aware of the ways to determine how much amount you should pay in the form of your credit card bill and the repercussions of late payments, consider online credit card bill payments. They are easier, simpler, and are less time-consuming. With online credit card bill payment, you won’t end up damaging your credit score because you couldn’t fit a trip to the bank in your daily busy schedule.