The Glaring Way Credit Card Moratorium Operationalizes

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TIt is important to understand how moratorium on your credit card dues operates as and when liquidity issues arise. Credit cards are fairly sophisticated payment tools. They would not be rewarding unless used responsibly. Careless usages may play havoc with your finances. Amid the raging COVID-19 scare, the RBI has announced a moratorium on credit card dues. This is in addition to the availability of all retain loan EMIs. This points to the fact that you can put off the payment of your credit card dues happened after March 1st, 2020 until August 31, 2020, by taking recourse to the moratorium support.

Considering the liquidity issues, turning to the moratorium on your credit card dues for relief can help. This will not impact your credit score during these long 6 months’ tenure. It is to be understood that this is just a postponed of your dues and not to be construed as a waiver for your repayment commitment. Interest accrued on the outstanding amount will continue to do so. The credit card user will have to clear off the entire outstanding amount that includes the interest charges when your due date falls as soon as the completion of the moratorium period. Therefore supposing that you avail the moratorium on a credit card or have already opted for it, it’s vital for you about its knowhow. 

Key points to understands how the moratorium works

Normally, as you spend through a credit card, you get an interest free period of up to 50 days to settle your bill. Your due date would fall on the last day of this interest-free tenure. In case your payment stands delayed, interest rates and late payment fees are charged on the outstanding amount. So also, your credit score can be noticeably affected adversely. Credit card companies also give you a “Minimum Amount Due”. As for a moratorium, most of the credit card companies have written off the requirement of paying even the minimum due during the interim. Non-payment of dues on the impacting your credit score too. Interest will go on to add to your dues till at last repayment gets completed.

Check with your credit card company on how it is extending the moratorium facility

The point now is to get clear-cut clarity on how exactly the moratorium facility offered in your case. Then you may make a crucial decision. Sometimes you can avail of this facility by simply circumventing your car payments on the dates due.

So, should you opt for the moratorium on your credit card dues?

Opting for the moratorium backup would take you to interest charges on outstanding dues. You can go further into the emergency fund. You can also seek a loan from your friends or family members. If nothing favors you may opt for the moratorium.

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