I am using SBI Credit card and I have purchased for Rs 11000 since Jan 2018 using the card and monthly I used to pay the minimum balance. Now I found that I have paid rs 16000 since jan 2018 and usage Charges itself is Rs 11900. Now Rs 30k is outstanding. Am I wrongly used the card? Now what is the way forward? I have to close the outstanding in one go?? Please suggest.
Paying the minimum payment amount only is a grave mistake. That is not the way we should use it. In case of non-complete payment of bill, like what you have done, the remaining outstanding balance that is unpaid
as well as every subsequent purchase incurs high interest as specified by the bank (~ 36% pa).
I believe you are not aware completely of the way credit card works.
Please pay your complete outstanding as soon as you can.
Some tips for credit card usage:
1. Always settle your credit card bills in full else you could very soon see the outstanding balance snowballing. Compounding works both ways.
2. Keep a watch for the bill pay by date. Ensure you pay the bill at least 2 days in advance of this date to avoid any surprises.
3. You eventually need to pay up for every bit of credit card usage. Point 2 ensures there is no late fee or interest.
4. Make the credit card work for you - look out for cashbacks/reward points/miles. Remember this is additional benefit. Primary motive would be to still use the card judiciously.