Using the Autopay Feature on Your Credit Card to Make Payments

In recent times, we have all transitioned from cash to cashless. Before the advent of digital money, there were cards. As soon as you open a bank account, you are handed certain things. Inside the envelope are your passbook, chequebook and two cards: a debit card and a credit card. Both cards are used for monetary transactions, but as the name suggests, if you use the debit card, money will be deducted from your account. Whereas, if a credit card is used, you can make transactions even if you don’t have enough balance. You just need to pay back the amount at a later date to the credit card company. With the advancement of technology, companies have introduced a new feature known as “credit card autopay.” Nowadays, everything is automatic, even our washing machine. All these automatic concepts are meant to enable us to save time. Similarly, by enabling the autopay credit card online feature, money is debited on its own at a stipulated time without your interference. Cool, isn’t it?   You do not have to worry about missing out on your payments and the bank serving you a notice for non-payment.

Benefits of a Credit Card

I still remember, as soon as my salary account was opened, my father prohibited me from using a credit card. He believed that I would indulge myself in a shopping spree or forget to make the payments on time. Well, he was not wrong! Fast forward to the current situation, and I see my husband relying more on credit cards. Sceptical me tried to stop him at first, but then he said something that changed my perspective. Let us see his reasons for convincing me:

• Credit Card is safer

Suppose your wallet gets lost or stolen; if you have cash, say goodbye to your money. If your debit card is used fraudulently, money will be debited from your account instantly. Even if you complain to your bank, recovering the money will take a little time, and your account may go for a toss. On the other hand, if your debit card is misused, you can alert the bank immediately. By doing so, even if purchases have been made using your credit card, you won’t lose any money.  

• Track your spending

You can even put a limit on your expenditures. There are certain budgeting apps that import data from your bank account and credit card. The apps help you to keep in check before you overspend.

• Rewards

Lots of additional privileges are provided, like discounts, cashback, gift vouchers, reward points, and many more. Online credit card payments reap better benefits than shopping in a physical store.

• EMI conversion

If you cannot pay by the due date, your purchases will be converted to EMI. However, interest will be charged.

• Credit score

Maintaining a good credit score has many benefits. If you repay your debts on time, it will reflect on your credit history. If you want to apply for loans in the future, many companies check your credit history for eligibility.

 Impact of a good credit score

As discussed earlier, having a good credit score ensures that lenders will readily agree to process your loan application or another credit card. The credit score is known as the CIBIL score. The 3-digit number is the sum of your credit history, report, and rating. In CIBIL, credit scores range from 300 to 900. If you have a score above 750, your loans will get approved faster. You might be approved for a higher loan amount at a reduced interest rate.

 Not having or using a credit card and not taking loans in the past, will harm the credit score. It will be difficult for the lender to determine whether you are likely to be a defaulter when it comes to your loan application.

Closing previous loans has a beneficial impact on the credit score. You will be considered creditworthy if you avoid using your credit card too much and pay your credit bills regularly.

Nowadays, we all have fast-paced lives. Under work pressure, we can’t even spend enough time with our family. Keeping track of the expenses and paying them before the due date, can be a tedious process. That’s where the credit card autopay feature comes to your rescue.

Advantages of enabling the autopay feature on your Credit Card

The autopay feature helps you pay the bills automatically in each billing cycle. You can set up an autopay feature on your credit card through banks or credit card issuers, or enable autopay for your credit card online using internet banking. Once you have linked your bank account, you have to set up your payment amount, date, and schedule. Make sure to set up a monthly minimum so as not to disrupt your budget. It is very important to set the payment date in such a way that you have received your salary or payment, before the due date of the credit card’s statement.

Even though it is advisable to pay your outstanding amount in full, it is not possible all the time. By keeping your expenses low and setting up autopay on a good schedule, you can avoid late fees and pay a small amount of interest.

Customers will receive pre-debit notification via SMS or email 24 hours before the transaction, according to RBI guidelines effective October 1, 2021. Recurring payments exceeding Rs. 5,000 require customer approval. This safety feature aims at limiting the fraud of unscrupulous, unapproved payments.

Now that it has been established that having a good CIBIL score, makes you eligible for a higher loan amount, go ahead and apply for a loan. Be sure to check the Piramal Finance website (www.piramalfinance.com). For a personal loan, log in at https://www.piramalfinance.com/personal-loan. Do check out various other products and schemes, including home loans. However, it is advisable to have good knowledge of the risks and features before committing.