Here are a few frequently asked questions that may help you decide better whether to opt for a moratorium or pay the credit card dues now.
Credit Card Dues: Amidst the lockdown in the country because of the Coronavirus pandemic, the government has come out with several relief measures for the citizens of the nation. The RBI has permitted banks to allow a moratorium of 3 months on term loan EMIs including credit card outstanding dues. The moratorium period for credit cards dues and loans taken on the credit card will apply from March 1, 2020, to May 31 31, 2020. The moratorium, however, is an option for the cardholders and, therefore, one may keep paying the dues as and when they arise as per the credit card billing cycle and the due date.
Here are a few frequently asked questions (FAQs) that may help you decide better whether to opt for a moratorium or pay the credit card dues now.
When to pay after a moratorium
As a credit cardholder who wants to opt for the moratorium, one can defer the payment till May 31, 2020. By opting for a moratorium, one will need to pay the minimum amount due or total outstanding amount and also the accrued interest charges on the due date falling after May 31, 2020.
Transaction made in moratorium period
By opting for a moratorium, the transactions made till May 31, will not be enjoying the interest-free period. This is because credit card interest-free period of 45-51 days is allowed only if outstanding dues are completed paid by the due date. So, your June 2020 credit card statement will include all previous due amount ( before moratorium), amount transacted during moratorium and interest levied on both these transactions.
How to avail credit card moratorium
If your current financial situation requires, you may opt for a moratorium, however, remember you are merely deferring the payment. The full dues will, anyhow, have to be paid later on including interest amount. The interest rate on a credit card is typically between 36 per cent and 42 per cent per annum.
If you are sure about making the full payment in 3 months time, paying interest for that period may still be fine but if you are not sure of your finances getting improved over the medium term, the interest portion on your card will balloon-up into a big debt.
It is also important that you do not go for fresh transactions during moratorium period so as to keep the dues lower. Take an informed decision knowing well that opting for a moratorium will only help you tide over the financial crunch temporarily.
