ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Even though it is widely believed that paying only the minimum balance would not make you liable for interest charges, it is not true. In reality, you will be paying interest on the outstanding amount starting from your due date. Hence, it is strictly advised that you pay your credit card overdue in full.

Detailed explanation-2: -Credit cards charge interest on any balances that you don’t pay by the due date each month. When you carry a balance from month to month, interest is accrued on a daily basis, based on what’s called the Daily Periodic Rate (DPR). DPR is just another way of saying what your daily interest charge is.

Detailed explanation-3: -If you don’t pay your credit card bill at all, you will likely get charged a late fee, lose your grace period, and have to pay interest at a penalty rate. Your credit score will also go down if you fall at least 30 days behind on a credit card bill payment.

Detailed explanation-4: -As for the question of whether a lender can charge a late fee on a late fee, you will incur an interest charge on late payment fees. That comes about since your late fee will be added to your outstanding card balance.

Detailed explanation-5: -You will have to pay a late fee if you pay your bill after the due date. The late fee would be charged by the bank in your next credit card bill. In a recent move, the Reserve Bank of India (RBI) has directed banks to charge late fee only if the payment has been due for more than three days after the due date.