Is it Beneficial to Continue 3 Months Moratorium for the Credit Card Bills until August?
Last Updated : May 23, 2020, 7:12 p.m.
Earlier, the Reserve Bank of India has given a 3 months moratorium period from March to May in which the credit card users can skip their bill payment. According to the RBI’s guidelines your CIBIL Score will remain unaffected even if you skip the payment of the credit card bill for 3 months. But recently the Reserve Bank of India has extended the 3 Months Moratorium from June to August. Now, many individuals are in the dilemma that is it beneficial to continue 3 months moratorium for the credit card bill payment until August. So, the answer is NO because 3 months moratorium will only defer the payment but your bill amount will be not waived off and the interest will be charged on the outstanding amount. You must explore the various drawbacks of option the 3 months moratorium again from June to August.
Why Opting 3 Months Moratorium Again is not Good for You
There are various reasons why 3 months moratorium will create a negative impact on your financial position and you must face the financial crisis once the period of 3 months is over.
Interest will be Charged on the Outstanding Amount
If you have chosen the 3 Months Moratorium from March to May then it would not be a good choice to continue it until August because you will be having an interest amount outstanding from March to May. On the other hand, if you continue 3 months moratorium then the bank will add the interest for the month of June, July, and August. Thus, as a result you will have to pay a lump sum amount in the future with an extra amount of interest.
This facility is helpful for protecting the CIBIL Score but the bank will charge interest on the outstanding amount even if you have chosen 3 months leverage.
Increases Unnecessary Debt
As you can see that the interest on the outstanding amount keeps on increasing every month so it will create an unnecessary debt on the credit cardholder. You can skip the burden of extra debt by paying the credit card bill on time. You will also have to pay the interest for the month of March, April, and May if you had chosen the 3 months leverage earlier.
Therefore, unnecessary extending the payment of the credit card bill is not a good choice and it would be not beneficial for you in the future.
Tenure will be Increased
If you have taken any loan on the credit card then the tenure for the repayment will also increase after choosing 3 months moratorium. The debt will remain with you for a long time and the interest will be charged every month.
So, if you are having enough funds then it is not good to choose 3 months moratorium again from June to August.
You have to Pay the Bill whether Today or After 3 Months
It is a fact that you will have to pay the credit bill whether you pay it on time or delay it for 3 months. If you pay the credit card bill on time and don’t opt for the 3-month moratorium period then you will get rid of the interest that will be charged on the Outstanding amount of the credit card. You must be aware of the amount of interest if you have chosen the moratorium period from March to May.
So keeping in mind the extra amount of interest, you must clear the bill on time rather than delaying it by 3 months again.
EMI on the Loan is only Postponed and Not Waived off
The 3 Months Moratorium Period will only postpone your EMI until August 2020 but it will be not waived off. So, it is better to pay the credit card bills on time rather than paying the bill amount with an extra amount of interest. The choice is absolutely yours.
Conclusion
Well, after reading the above reasons you can conclude by yourself that it is not beneficial to continue 3 months moratorium for credit card bill payment until August. It will create a burden on you and you will have to face it once the moratorium period expires. You must make the timely payments of the credit card bills rather than deferring it by 3 months.