Have multiple Credit Card bill payments? Know which ones to prioritise

You are finally ready to make your credit card payment, but with multiple cards, you're wondering how to pay credit card bills. Do you pay all at once? Do you pay them equally? Do you settle one first? Which one?

The first step is to make a plan to help take the load off your credit card bill payments across multiple cards. The following tips will help you pay your credit card dues and tackle credit bill payments efficiently. Make a list of your credit cards, their statement dates and the due dates and pay off the card that is closer to the due date.

Pay off high-interest Credit Card dues first
 

Typically, debts with a higher interest rate cost you more money down the road than those with lower interest rates. It's best to pay the minimum amount on your different bank credit card on or before the due dates, then work towards paying the card with the highest interest rate first. Although it's easier to pay off the smaller ones first, the higher interest will add up in the long run.

List down the interest rates of all your credit cards from highest to lowest. Once you understand the interest rates and the minimum amount, pay off the ones on the higher side one by one, and if there's any spare money left, allocate it towards the remaining debt with the next highest interest rate.

Pay off the card with the lowest balance first

Another way of squaring off your debt is to pay your credit card bills online for the card with the lowest balance first. Say you have two credit cards, one with a balance of Rs 30,000 and the other with Rs 3,00,000. Naturally, it is easier to clear the prior balance first.

The benefit of this approach is that you will get the ball rolling on your credit card payments, and, second, you'll pay off at least one of your cards as quickly as possible.

Just remember that each credit card comes with interest rates. And the card with an outstanding of Rs 30,000 may not be the one with the lower interest rate. So, be mindful of this while paying your dues.

Consolidate your debt

Managing multiple credit card bill payments every month can be a hassle. Sometimes you may miss the dates of your different cards, which you don't want. One way out is to look into consolidating your debt into one monthly payment.

For example, you have three credit cards with an outstanding balance of Rs 1,00,000 each. You can consolidate this into a single credit card by opting for balance transfer facility. While choosing the balance transfer facility make sure you transfer your balances to the credit card which has the lowest interest rates.

This way, you need not focus on multiple bills or different interest rates. You just have a single loan to repay - making life easier and less complicated. Banks like IDFC FIRST Bank also offer the lowest APR, making it a cost-effective option.

To sum it up

The strategy that will work for you depends on your credit card bills and current financial situation. 

If you are low on finances, you can make only the minimum payment along with the higher interest rate dues. If you have some extra funds, you can clear off one card first. And when you need some assistance, you can always turn to IDFC FIRST Bank's credit cards. With the lowest interest rates, a plethora of benefits, different credit card options, and countless rewards, you will get more than you expect.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.