Credit Card Auto Pay Functionality

[Sushubh]

What do banks charge? Full payment or minimum payment? What if I want to not pay for a month and have money on credit for a month or two? Why would a credit card company offer this option (kind of forced on my account as it was a new card) when they stand to not make money from late payments?

I mean I understand that it helps them in getting payment if a person is intentionally not pay. But if a person is not interested in paying, he would not be keeping the funds in the connected bank account in the first place right?

 

[SVK]

Did not understand what your query is.
You don't want to have auto-pay, or you want to know charges for auto-pay, or what are modes of auto-pay (full bill or minimum amount).

I do auto-pay for my Citibank credit card from by Citibank account. It happens every month at 2 or 3 date. No charges. I also have option to opt for minimum payment.

 

[Smh]

I guess he means, why banks makes it easier for you to pay your bill, when they can make money if you don't pay your bill on time

 

[Sushubh]

well my primary question was which amount does bank auto debit... minimum amount or full bill. in case of svk, the bank offered him the option. i would need to check with yes bank customer care on which amount was selected for my card if i do get approved or whatever.

 

[manu1991]

Well from the banks perspective, customers who take up this facility are those who would have paid their full bill anyways. Hence, its better that the bank gets the entire amount on the day the bill is generated rather than the due date which would be after 20 days or so, hence saving interest.

 

[Sushubh]

but the customer would be paying interest for those 20 days right? and that would certainly be more than the interest they lost during the period?

plus... what do you guys do in case you want to keep the money on credit. for example you need the money in your account for something and are willing to pay the interest for a month or two on credit card debt? do banks allow for exceptions?

 

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[Sushubh]

i guess conversion of bigger purchases to emi is a way around.

 

[Deleted member 7160]

Well as SVK mentioned, Citibank let you decide you to pay minimum or full payment when you opt for auto debit. Even HDFC bank offers the same (minimum due to full payment).

In my case, Citibank had allowed me to defer my payment on my credit when I was switching over my job and did not get salary for straight 2 months. In fact, Bank was more than happy to do that as they were earning quite a handsome interest in those 2 months. However, You need to talk to bank in advance so that they do not report this non-payment to CIBIL.

 

[manu1991]

but the customer would be paying interest for those 20 days right? and that would certainly be more than the interest they lost during the period?

plus... what do you guys do in case you want to keep the money on credit. for example you need the money in your account for something and are willing to pay the interest for a month or two on credit card debt? do banks allow for exceptions?

No you dont pay any interest during that period. If your bill is generated on the 4th of every month and your payment due date is 24th, then under autopay the bill will get deducted on 4th only, whereas if I am paying manually ill pay on 23rd. There is no interest charged in either case, but from the banks perspective, Scenario 1 is better.

Regarding the second, I have not tried but theoretically, what if you add funds to Paytm using your CC and then transfer to your bank account at 0.5% wont it work?

 

[Sushubh]

so i am losing interest free loan for 20 days? this goes against their own claims of providing up to 50 days of interest free credit.

i expected them to take out the money on the last day of billing but makes sense that it would be taken out on the bill generation date itself.

would check with customer care if i can get it disabled after credit card is issued. enough things have happened already which has put me off wrt this card. a guy came from yes bank yesterday to my place to 'see my office setup' even though i had told that i just have a computer if you are looking for an office. freak show. salesman must have lied on my application.

regarding the second... what is the point of a credit card if i cannot get a credit when required! 🙂 i guess i would really try to get the autopay option disabled. it seems more trouble than useful.