Bill Payment in India

A credit card – a payment card, is a convenient way to pay for goods and services purchased from online and offline merchants. This method of payment works on the principle that the cardholder will pay the card issuer the amount spent on purchases plus other agreed charges at a later date. The card issuer (in most cases a bank) creates a revolving account and grants a line of credit to the cardholder. The cardholder uses this financing mechanism to borrow money in order to pay the merchant or take cash as advance.

Not only does a credit card offer a comfortable arrangement to pay for purchases, it comes with attractive offers, reward programmes and many other benefits. Banks offer a variety of credit cards to suit the requirements of every kind of consumer. Though, a credit card may seem to be a good way to pay for shopping, one must be careful not to fall in a trap of permanent debt by not paying the credit card bill on time. This can lead to disastrous consequences where the cardholder is charged a high rate of interest on the outstanding amount. If not cleared on time, this amount will keep on increasing at a compounding rate.

To avoid such a scenario, one must pay the monthly bill on time. This not only helps to stay debt-free but also positively affects one’s CIBIL score. The CIBIL score, ore credit score is affected negatively because of payment of just the minimum due amount, partial payment, or late payment. It is best to manage finances in a way that one is able to pay the credit card bill in full.

Credit card issuers today offer a host of options to make bill payment in a hassle-free manner. Knowing about these ways helps avoid missing the payment due date and incurring penalties as a result.

Credit Card Bill Payment Options

Banks offer a variety of online and offline modes of payment to pay the credit card bill. Some of them can even be described as a hybrid of both. The various methods are discussed in detail below.

Online Payment Options

The internet has simplified banking. It has made it very easy to make purchases online and also make the requisite payments online. This has helped significantly in making credit card bill payments through web-based options. These payment options include:

  • Online Banking/Internet Banking/Net Banking

Credit card bill payment can be made through online banking in a quick and easy way. This method, also known as internet banking or net banking, allows payment through online account transfer. One has to login into one’s bank account over the internet using the internet banking username and password. This bank account can either be from the credit card issuer (bank) or may even be that of another bank (non-issuer bank). After logging in, one can view the credit card purchases, card statement, payment dues date and outstanding amount. One can decide whether to pay the minimum due amount, total amount or an amount of choice. The payment is made immediately or within one business day.

  • NEFT

NEFT or National Electronic Funds allows one-to-one transfer of funds across the country. NEFT facility can be used to make credit card bill payment as this scheme makes it possible to transfer funds electronically from any bank branch to an account with any other bank branch in India. In order to make payment using this method, one has to login into the online banking account, select NEFT as a mode of payment and add the beneficiary – credit card number as the payee account number. One has to enter accurately, the beneficiary details such as beneficiary name, account number, bank, branch, and IFSC code. NEFT payment made during working hours is credited on the same day. However, payment made after working hours is credited on the next business day.

  • IMPS

IMPS or Immediate Payment Service is an instant and real-time inter-bank electronic funds transfer system accepted all over India. What differentiates IMPS from NEFT is that the payment is processed instantly and that this service is available 24x7, all round the year – even on bank holidays. The process of making credit card bill payment using IMPS is the same as NEFT. One has to login into the internet banking account and add the beneficiary by entering relevant details. IMPS payments can also be made using mobile phones and other channels like ATM, etc.

  • Mobile Banking

Banks have optimised their banking websites for mobile phones. This way, one can access the bank account from any mobile device (on the mobile site) with an internet connection to make payments. The web address (uniform resource locator) of any mobile site reads like . The interface of a mobile bank website is user friendly to conveniently use on a relatively smaller mobile screen. Credit card bills can be paid easily using this method – on the go, anywhere in the world.

  • Mobile Application

Banks have also made special applications (known as mobile apps) for mobile phone devices with internet connectivity. These offer almost all transacting functions and can be used to make credit card bill payments. All one has to do is download the mobile app, open it using the unique customer ID and password and choose credit card payment to pay the requisite amount. Payment can be made from any location at any time of the day. Mobile apps of established banks are available on all major mobile operating systems – Android, iOS, and Windows.

  • Standing Instructions/Auto Debit

Standing instructions can be given to one’s bank to automatically debit the credit card payment amount from the savings account or current account. One can choose to pay the credit card bill in full or pay only the minimum due amount every month on a specified date or on the payment due date. This way of payment ensures that one does not ever default on credit card bill payment or incur any late fee as long as the bank account has sufficient funds. It also relives one from the responsibility to keep track of every credit card bill. Payment is automatically made to the credit card account.

  • Visa Money Transfer

Also known as Visa Credit Card Payment, this innovative service allows transfer of funds from the customer’s bank account to any Visa credit card issued in India. This facility makes it possible to wire money within 3 business days to pay the credit card bill (only for those credit cards powered by Visa). A nominal fee is levied by the initiating bank for using Visa Money Transfer facility. The transaction limit for each Visa Credit Card Payment transaction is Rs. 49,999.

  • ECS

ECS or Electronic Clearance Service is another way to pay the credit card bill. It is similar to the auto debit method of payment. It allows one to give standing instructions/authorise to debit a non-credit card issuer bank account every month to pay the credit card bill. Electronic Clearance Service gives the option to pay the minimum due amount, total due amount or a fixed amount.

  • Debit Card

One can even use the debit card to clear the credit card dues. This can be done online or at the ATM. The amount specified is transferred from one’s savings account or current account to the credit card account.

  • Phone Banking

To use this option to make a credit card bill payment, one has to call the phone banking helpline of the bank in which one holds an account and request for a fund transfer to pay the credit card bill. The IVR and phone banking officer will ask for personal details for authentication. Assistance at the phone banking hotline is usually is available 24x7, every day of the year.

  • Other Portals

Banks have also tied up with online payment companies in order to provide convenient ways to pay the credit card bill. BillDesk is one such popular portal used by many established banks. It offers a secure and convenient way to make payment from any bank account to the credit card account. Once the cardholder selects his/her bank and enters the card details and the amount to be paid, one is automatically redirected to the bank’s payment interface. Here, the transaction is authenticated before final payment.

Offline Payment Options

There are still several ways to make offline payments. These modes are generally slower, and often take 2 or more days to show up on your account. The most common methods are described here.

  • Cheque Payment and Demand Draft

The traditional way to pay your bills is still a viable option to pay your credit card bills. The credit card number is listed as the payee name on both cheques and demand drafts. They can be dropped off at the bank, at special check drop-boxes, and in some cases, even in the ATMs of the issuing bank. This method does have the drawback of having the slowest turnaround time. Payments may take over a week to reflect in your account.

  • Cash Payment

Cash payments may be made directly at a branch of the issuing bank. However, bill payment services can also be clubbed under this method. Paying cash at the branch usually reflects by the end of the business day but paying through a bill payment service might take 1-2 working days.

In addition to these methods, some banks also offer a collection option to their premium customers. A bank executive arrives at your home or office and collects the payment in person. Payments are usually accepted as cheques or cash. While it is good to have this option, it is rarely useful or convenient. Payments made in this way usually take the same amount of time as the instrument used to make the payment plus an additional working day.

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