MUMBAI: Failing to repay the entire credit card bill by the due date will incur finance charges on the unpaid bill. The charges usually range between 30-49% per annum on the unpaid credit card bill. Non-payment of the entire credit card bill can also lead to the revocation of the interest-free period on fresh credit card transactions. In this piece, we take a look at some of the important steps you can take if you aren't able to pay your credit card bill on the due date

Sahil Arora - director, Paisabazaar.com said, “All fresh credit card transactions would attract finance charges till the unpaid bill component is repaid in full. Failing to repay the minimum amount due mentioned in the credit card bill will incur an additional penalty in the form of a late payment fee of up to Rs1,300, depending on the card issuer and the bill amount."

Non-repayment of the minimum amount due would also adversely impact the credit score of the concerned credit cardholder.

Those who cannot repay their entire credit card bills by the due date can convert their entire credit bill or a part of it into equated monthly instalments (EMIs), depending on their immediate repayment capacity. As the interest rate of such EMI conversions is much lower than the finance charges, it will help in reducing the interest burden. As the tenure of such EMI conversions can range anywhere from 3 months to 5 years depending on the card issuer, card users can choose their EMI tenures based on their EMI affordability.

“EMI conversions reduce the interest cost of the financially distressed credit cardholders, save them from incurring finance charges on fresh credit card transactions, allow them to repay the unpayable bill component in smaller tranches as per their repayment capacity and avoid adverse impact on their credit scores," said Arora.

Credit cardholders who can repay their entire credit card bill within 2-3 months can also opt for credit card balance transfer wherein the credit card balance is transferred to another credit card issued by a different card issuer at a lower or nil interest rate for a pre-specified period, popularly known as a promotional interest-free period. However, the new card issuer would start levying finance charges on the unpaid transferred balance after the expiry of the promotional interest-free period.

If your debts have gone too big, you can avail of a personal loan to repay the credit card bill. Abhishek Soni, co-founder and CEO at Upwards said, "You should opt for a personal loan vs borrowing against a credit card as it is a much cheaper option." The rate of interest on personal loans can be 12-16?pending on your profile and amount needed but those on credit card borrowing is typical, it can go beyond 36% interest rate.