With the advent of the internet, the pool of knowledge has widened a lot. But this has also given way to a lot of misunderstanding and myths among people. Even the credit cards that we buy are not safe from myths. 

Different people have different opinions about financial instruments and that is the reason that many people end up making wrong choices and affect their financial stability. Any misinformation related to credit cards can cost huge. 

To help people get proper knowledge, we have jotted down five common credit card myths and revealed the truth about them. Take a look!

1. Single Credit Card is Enough

While there is no doubt that one should abstain from over-spending, having multiple credit cards does offer a lot of perks than one can imagine. All they need to do is handle their finances well and keep a track of their expenses. There are plenty of credit cards in the market that come with lucrative offers and rewards that help save some bucks and grab amazing deals on various purchases. Thus, people can surely buy more credit cards as per their needs and enjoy their benefits.

Buying a New Credit Card Affects Credit Score

While, buying a credit card does result in a “had credit enquiry”, a single one is unlikely to affect your credit score. Thus, it is important to choose the right card as per your requirements and spending habits. If a person pays credit card bills on time, they get a good credit score in turn.

2. Settling Monthly Dues Sooner is Best

It may sound tricky but this is one of the most common myths about credit cards. Every month, one starts panicking about their credit cards dues and tries to make the payment sooner so as not to hamper their credit score. 

However, the truth is while late payments do make a difference, it takes almost 30 days for that. In short, a person needs to be miss at least 30 days to actually affect their credit score. If that’s not the case, well, one can afford to miss the last date at times.

3. Cancelling Old and Unused Credit Cards

No doubt that when we don’t use a product, the best things seems is to just discard it. But that’s not the case with credit cards. Now, when person cancels their credit cards, they lose the credit line and they have less available credit to their name. This also affects their credit score, which in turn, can affect their loan application in future. Thus, it is usually suggested that people can have at least one card open for its available credit and account history.

4. No Negotiation on Credit Card Terms

Most of the people feel that they have to follow whatever terms and conditions their banks have give them. But the truth is, banks are always looking at keeping their customers. Therefore, they can make concessions in the conditions to be at your side. So, if you feel that you are paying a lot of interest or annual fee on the credit card, try contacting the company. They may waive it or offer you other perks to make it worth your while.

In case you are looking for buying a new credit card, explore our website and apply for the one that suits your needs the most. For more such articles, keep reading BankingOnTips.

Most of us opt for credit cards which benefit us in our day to day life, like cashback offers on fuel, shopping, travel etc. 40% of credit card users have cards with fuel cashbacks. This news is going to hurt us a lot.

From October 1, 2019, majorly all the banks in the country are going to discontinue the cashback credit cards at all the petrol pumps and fueling stations. This is going to come into effect after an advisory issued by Public Sector Fuel Retail companies.

All the OMCs (Oil Marketing Companies) have told the banks to terminate the cashback benefit on their credit cards whereas cashbacks and discounts for other digital payment methods like PayTM, Phone Pay etc. will still be in effect.

There are three state-run oil marketing companies in the country, namely, Indian Oil Corporation Ltd, Bharat Petroleum and Hindustan Petroleum Corporation Ltd. They offer cashback up to 0.75% per transaction value of the fuel purchased using debit/credit cards and electronic wallets. This cashback is reflected in the buyers’ bank account or wallet in three working days.

Government introduced this discount after the cash crunch of 2016 at the time of demonetization. The prime purpose was to encourage digital banking and payments. After three years of demonetization, the percentage of digital money transfers and payments has increased at a striking rate, however, the three oil marketing companies are still bearing the discount/cashback cost. 

It is a celebrated fact that paying your credit card bills timely is not only a good habit but it also helps you financially in future, by throwing a positive impact on your credit score. And a good credit score makes you a reliable individual to lend loans. On the other hand, late payments, lesser payments or minimum payments can also hamper your credit scores.

After a massive digitalization, people are mostly comfortable to pay their credit card bills through net banking or phone banking. Not because it saves time or is comfortable but because it secured and cost effective. Let us now know about the benefits of paying credit card bills through net banking.

- Net banking payments are out of any transaction fees or payment processing fees etc. You would have to pay these extra charges if you pay it through other modes like ATM etc.

- This method of paying your credit card bill is more secured and safe due to the encrypted security in the technology used to pay it online. The more people have started using this medium, the safer it has become to pay bills with net banking.

- It is hassle-free and easy to login and pay through net banking. It is just a matter of few seconds; therefore, it is time saving as well.

Net banking process varies from bank to bank though; the major method is almost same. Have a look at this process:

- Log on to the website of your credit card provider

- Select ‘Pay your Credit Card bill’ option

- Enter your credit card number, email id and the amount you need to pay (either minimum or full outstanding)

- On the payment modes page, select Net Banking and fill in the bank details/bank account details to pay

- After that, you will be redirected to the bank’s login page

- If the website of your preferred bank is beginning with ‘https://.’ It is considered as secure

- Enter you username and password on the login page

- Accept the payment details like the amount etc. and confirm it by entering the OTP sent to your registered mobile number

- On the successful transaction, you will be shown an e-receipt which is to kept safe for future requirement

This way, your credit card payment is done in a fraction of seconds. Yes, you should have a good internet connection for using net banking for making any payments.

If you are some of those people who generally forget paying their credit card bills on due date, this blog is for you! Forgetting your credit card bills invites so many ‘not-so-good’ things like late payment penalties, increased interest charges due to added up outstanding amount and critically affected CIBIL i.e. credit score. Therefore, to get rid of this expensive habit of procrastination and forgetting your credit card bills, automatic payment modes are way better options.

Automatic payment simply known as ‘auto-pay’ is a kind of regular monthly debit from your bank account (savings/current) which settles against your monthly utility or credit card bills. You need to opt for it in your bank account either through net banking or mobile banking. You must fill the details carefully like your usual payment amount (total outstanding or minimum amount) along with the due date. The money will be deducted before the due date which will not burden you with any late fine.

If we talk about the advantages of automatic payment of credit card bills, the most important one is convenience. You save a lot of time as you need not to remember the due dates, amount to be paid etc. which is a huge help in today’s busy time where you hardly have any time for such chores. And a little mistake can lead to big monetary losses. Therefore, choosing auto-pay is a good option.

It also comes with a bit of disadvantages. For example, if you don’t have much funds in your account at the time of auto-pay, your will miss your payment in any case. And on the other hand, auto-pay is ultimately a mechanic program, it is likely to system generated errors! You should check the process of auto-pay at regular intervals to get updated about what you pay. Sometimes, there are wrong entries or fraudulent transactions in your monthly bill statement. Automatic bill payment option does not check all these details, so there are probable chances of you paying a higher amount for those duplicate bill entries etc which is again, your loss. But there are always two sides of everything, so is here.

If using wisely and without wholly depending upon it, automatic pay is a great substitute to paying bills manually.