What is the unbilled amount on a credit card?

With the credit card in your pocket, you walk into the shopping mall, pick your favourite dress, swipe the card for payment, and walk out with your stuff. This is how simple life becomes with this small rectangular plastic card. Credit cards are an example of a revolving loan in which your exhausted balance is restored after you settle the utilised funds. The lender allows you to pay off your debts within 27-30 days of the transaction date. However, one thing that always confuses the dues clearance process is the unbilled amount on the credit card. Let's find out what this actually means.
 

What is the unbilled amount on the credit card?

The unbilled amount refers to the credit card transaction that you make after receiving your credit card statement. Credit cards often have a billing cycle, and any unbilled transactions are usually shown on the next month's statement.
 
Your credit card statement shows the outstanding balance, which you must pay by the due date to avoid paying interest penalties. If you are wondering how to check the unbilled amount, go through the next month's credit card statement.
 

Understanding the unbilled transaction in credit card

 
Consider the following example to better understand what an unbilled credit card transaction entails.
 
Suppose your credit card statement is generated on the fifth of every month. This means that your bill will include information about every transaction you made between the sixth of the previous month and the fifth of the current month. If your credit card bill shows a balance of Rs 30,000, you must pay it by the due date specified by your lender.
 
On the 6th of the current month, you used your credit card to purchase a smartphone worth Rs 25,000. So, do you have to pay this amount in addition to the bill you have? Absolutely not. Although the Rs 25,000 transaction occurs in the current month, it takes place after the statement is generated. As a result, the smartphone purchase bill will be considered an unbilled amount that you must pay in the following month.
 
If you believe you will be able to repay the unbilled amount easily, pay it before the due date. In case the amount is significant, the lender will usually give you 20-30 days to request that the dues be converted into a more manageable EMI. However, keep in mind that not every unbilled statement qualifies for EMI conversion; lenders typically set a minimum amount.
 

What are some common ways to check an unbilled amount on a credit card? 

 
The procedure for checking your unbilled credit card is determined by the type of lender. Here are a few of them.
 

• Net banking

  In case you have obtained a credit card from a banking institution, you can check your credit card bill via net banking. To use this service, you must first activate net banking and register your card. Linking your credit card allows you to check your available limit and pending payments.
   

• SMS alerts

  An SMS alert is another way to keep track of an unbilled amount. As soon as you use a card, this facility provides a real-time update. You can avail this service free of cost just by telling your credit card issuer.
   

• Customer service

  Every lending institution has a dedicated customer support team to handle credit card inquiries. The toll-free customer service number can be found on the lender's website or in the welcome kit provided to you. To obtain the unbilled card details by phone, call using the mobile number registered with the lender.
   

Also Read: How to clear credit card debt with a personal loan?
 

What are the consequences of not paying the unbilled amount on the credit card?

 
Failure to pay your credit card bills has several repercussions. These are:
 

• Hefty penalty

  You do not have to pay interest on unbilled transactions. But, if you miss a payment, the lender will charge you a penalty of 2-3% of the outstanding balance.
   

• Impacts on credit score

  Your creditworthiness suffers as a result of late credit card payments. Not only does late payment affect your credit score, but regularly exceeding 30% of your card limit also impacts your credit score negatively.
   

• Lowers borrowing capacity

  Delaying your credit card payment or missing your payment dues, convince the lenders that you have poor repayment potential. As a result, when you apply for any loan product in future, your application either gets rejected or you will get approved for the loan at a higher rate. 
   

What are the alternatives to credit cards?

 
You will find various loan products in the market that can help meet your short-term requirements. Some of them are–
 

• Personal loan

  This is the most popular unsecured financing option. You can borrow up to Rs 5,00,000 and apply for it through a lender's website or digital lending app.
   

• Bank Overdraft

  A bank overdraft, or OD, is the additional amount that you can withdraw over your bank account's current balance. This facility is available even if your account has no balance.
   

• Invoice financing

  Invoice financing is the way to go if you want an alternative to a business credit card. The lender will sanction funds against the outstanding account receivables under this arrangement. As a business owner, it is your responsibility to receive payment for invoices on time.
   

Also Read: Personal Loan or Credit Card Which one would you go for
 

To conclude

 
The unbilled credit card amount is the transaction that occurs after the lender generates the bill statement for a specific billing cycle. The total amount of such transactions are reflected in the following month's bill, and you must clear the payment by the specified due date. Failure to pay the unbilled transaction on time incurs a penalty, a loss of credibility, and a reduction in borrowing capacity.