Exploring the Role of Credit Card Bill Payment in Building Credit History

Credit cards have unlocked a new way to make payments, allowing us to make purchases when we do not have the means to do so then. This allows us to go ahead and buy what we wish without worrying about waiting till salary day.

A year ago, I learned the importance of building credit when my family member was denied a loan they desperately needed for not having a credit score and Credit history. Before that, even if I was interested in getting a credit card, I always thought that I could just spend how much I had as my balance and not have to worry about it.

But after finding out that credit card bill payment is one of the most effective ways to build or rebuild your credit, I got a Bajaj Finserv credit card and am very happy with my choice, and I am building up my credit history and have a good credit score.

What is a credit card?

A credit card is a way to borrow money from a bank or an NBFC to purchase any goods or avail of any services up to a credit limit set up based on your credit history and income.

Cardholders are required to pay back the money they borrowed along with any interest that has accrued and any additional charges which are predetermined, in their entirety, either by the billing date or over time.

What is credit card bill payment?

By using a Credit Card, you are using money that is not yours and essentially chipping into an IOU with the credit card issuer. And as with credit cards, if you do not pay your entire balance before the due date or up to a month after taking it, you will be charged interest. So pay the balance on time and be well on your way to building good credit.

How to build credit with a credit card?

Getting a credit card and maintaining it properly is an excellent way of building or rebuilding your credit. You must always pay your entire balance and not just the minimum amount to get the best benefit from your credit card.

Paying off your credit card is essential as it can lead you to financial ruin. Not paying your credit card bills on time can lead to considerable debt and damage your credit.

Here are a few ways how you can build credit using a credit card:

1.   Don’t spend beyond your means

Knowing your financial situation and not spending way beyond your means is always beneficial. Although credit cards provide many benefits for financial independence, they also have high-interest rates attached to them.

2.   Regularly pay your bills

Make sure to regularly pay your bills before the due date, as repeatedly missing credit card bill payments can damage your credit score and history.

3.   Don’t just pay the minimum amount

Clear out your balance before the due date as post 30 days; this balance will accrue interest, driving the cost up.


This is how owning a credit card can impact your credit score and history and what would happen if you do not make your payments on time. As I have mentioned, credit cards have become an integral part of many of our lives, so use them wisely.

Additionally, as soon as I got one and saw how helpful it was, my wife also decided to get a credit card to build her credit. And we both have been using my Bajaj Finserv app to make credit card Kotak payments.

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