7 Reasons Why Part Payment of Credit Card Bill May Not Be Bad

02 February, 2024

A Credit Card is a convenient payment tool that offers the financial flexibility to make purchases now for which you can pay at a later date. At a certain specific date of the month, your Credit Card issuer generates a Credit Card statement which is essentially a bill for all your spends within the billing cycle. Once the bill is generated, you can choose to pay the entire bill amount at once, pay the minimum amount due or make a part payment. If you’re unable to pay the Credit Card bill in full for some reason, you can always consider making a part payment. Keep reading on to know more.

What is Credit Card Part Payment?

A part payment of Credit Card bill refers to paying an amount less than what you owe. A Credit Card is a type of debt instrument where the used credit limit is what you owe to your Credit Card issuer. When the Credit Card bill is generated, you have a certain number of days to pay the bill. You can pay the entire bill and restore your credit limit. Alternatively, you can pay the minimum due amount to avoid late payment fees. The outstanding balance is carried forward to the next billing cycle and you will be charged interest. You can also make a part payment where the amount you pay is greater than the minimum amount due.

7 Key Reasons Part Payment of Credit Card Bill is Not Bad

While paying off your Credit Card balance entirely is the ultimate goal, making partial payments is wise for maintaining financial health and stability. So, here are seven compelling reasons why Credit Card part payment is acceptable.
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1. No Impact on Your Credit Score
   
   One of the biggest misconceptions about making partial payments on your Credit Card bill is that it will negatively affect your credit score. Fortunately, this is not true. Your payment history, credit utilisation ratio, and other factors primarily impact your credit score. Making at least the minimum payment required by your Credit Card issuer demonstrates that you are meeting your financial obligations. When you fail to pay the minimum amount due, your card issuer will levy late payment fees. This information is passed on to credit information companies that compute a score based on your debt repayment capabilities.
   
   

2. Keep Earning Rewards and Grab Product Benefits
   
   Many Credit Cards come with enticing rewards and benefits, such as cashback, reward points, lounge access, travel miles, or purchase discounts. The amount of Credit Card bill payment does not impact your Credit Card perks. You can continue to enjoy discounts, cashbacks and other perks without compromising your financial stability.
   
   You remain eligible for reward programs and other cardholder benefits when you make at least the minimum payment. By taking advantage of these benefits, you can maximise the value of your Credit Card and make it work for you. You should also note that if your outstanding balance is higher, you will have to pay higher interest. This may not be worth the rewards you earn.
   
   

3. Keep Control of Your Finances
   
   Life is full of unexpected expenses, and sometimes, paying off your Credit Card balance every month can be challenging. Making a partial payment allows you to maintain better control over your finances by ensuring that you meet your minimum obligations while addressing other pressing financial needs.
   
   By paying what you can afford, you avoid falling into the trap of accumulating excessive Credit Card debt. It's crucial to balance paying down your Credit Card balance and covering other essential expenses, such as rent, utilities, and groceries. Making a Credit Card part payment enables you to do just that, helping you manage your finances more effectively.
   
   

4. No Processing Fees or Pre-Closure Charges
   
   Another advantage of making partial payments on your Credit Card bill is that there are typically no processing fees or pre-closure charges. When you make a partial payment, your Credit Card issuer will calculate the remaining balance and carry it to the next billing cycle. They won't impose any additional fees for making a partial payment. You can also pay smaller amounts from time to time towards your outstanding balance and reduce your overall Credit Card debt.
   
   

5. No Long-Term Commitment
   
   Once you make a part payment on your Credit Card bill, you can repay the outstanding amount without being tied down to a rigid repayment schedule. Note that interest will also accrue on the outstanding amount until it is repaid in full. You can also repay a part of the outstanding amount. Without the restriction of long-term commitment, you have the flexibility and freedom to adjust your payments based on your financial circumstances.
   
   

6. No Limitations on Bill Amount
   
   You can make part payments on Credit Card bills, regardless of the bill amount. If your amount is relatively smaller, you can make partial payments and potentially minimise interest accumulation. Also, you can make smaller payments towards reducing your outstanding balance, allowing you to fulfil other financial obligations while also gradually repaying your debt. However, make sure you pay at least the minimum amount due.
   
   

7. Hassle-Free Process & Nominal Interest Rates
   
   Interest will be applicable on the outstanding balance when you make a part payment on your Credit Card bill. Typically, card issuers may levy nominal interest rates. Also, the process of making part payments is easy. All you have to do is log into your NetBanking or Credit Card account and select the option to pay an amount of your choice. Also, no additional documentation or Verification is required.
   
   

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*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.