Credit card is a type of card that allows the cardholder to borrow money from the bank with a credit limit allowed to make payments. As long as the credit card holder pays within the specified time (usually 45 days), there will be no additional charges for the card. If after this time, the bank will calculate interest based on the amount the credit cardholder spent on the bank.
Benefits and disadvantages of credit cards
Benefits of credit cards
- You can easily make large value purchases and repay small amounts
- Credit card statements make it easier to draft your budget
- Safe and convenient when you do not need to bring cash
- Building credit scores, very useful when you make loan transactions with the bank later
Disadvantages of credit cards
- Debt is easy if you are not careful with spending
- The convenience of credit cards can cause cardholders to consume excess
- Interest rates can cause small debt packages to grow larger over time
- Many risks arise when disclosing personal information on the card
Things to consider when opening a credit card
If you use a credit card to pay for all purchases, you should look for a card with a large credit line and many offers. In case you only use your card for emergencies, a basic card with a low interest rate and fee will suit your needs.
The interest rate on credit card debt can be fixed or floating according to the market, depending on the regulations of the card issuing bank. Interest rates for each bank are different. Credit card payment transactions will be charged after 30-45 days depending on the regulations of each bank.
Fees and penalties
Currently, credit card users pay a variety of fees in accordance with the regulations of banks and financial institutions. So, before choosing to open a credit card, you need to consider the fee schedule of many banks to choose a card that has a reasonable fee, affordable.
- Card issuing fee
- Annual fees
- Cash withdrawal fee
- Late payment fee
- Fees exceeding the credit limit
- Currency conversion fee
Promotion programs for cardholders
Most credit cards today come with attractive perks from brands affiliated with the card issuing bank. When making purchases or using the service, cardholders may be entitled to additional special promotions. Depending on the bank, there will be different incentive programs. So, you should choose a credit card with flexible incentive programs, really useful to you.
Card issuing process
– Customers wishing to open a credit card will come to the bank to fill out the card opening request form and provide proof of income as prescribed by the bank.
– When the bank receives complete documents, it will conduct appraisal, check the accuracy of the documents that the customer provides as well as the customer’s ability to repay debts.
– If the customer profile has met all conditions, the bank will conduct a classification to grant a credit limit.
– Before handing over the card, the bank will proceed to enter customer information data into the management system, encrypt this information on the card, and require the cardholder to sign and sign a sample signature at the bank.
– After receiving the card, customers need to keep personal information on the card and CSC (Card Security Code). If there is a risk arising from the customer disclosing information, the customer is solely responsible.
Normally, the time from the time the customer submits the card application to the time of receiving the card is from 5 to 7 working days.
Credit card payment date
Credit cardholders have 45 days of interest free, interest free (subject to bank regulations). Over this period, if you do not pay off your credit card balance, the bank will start charging interest based on the total closing balance.
On the monthly statement date, the bank will send you a statement of transactions for the month via the email address you have registered with the bank. After that, you have an additional 15 days to pay off your outstanding balance.
How to pay credit card balance
By the day of payment, the credit card holder may pay the whole outstanding balance at the end of the period or at least pay in the following forms:
Automatic payment: you can register with the service bank to automatically withdraw money from payment account to pay credit card debt balance (minimum payment amount or full debit). This is a simple and fast way to pay, ensuring that cardholders pay their debts on time. However, you need to maintain the balance in the payment account equal or more than the balance in the statement before the payment is due.
Cash payment: cardholders can go to the counter of the issuing bank to deposit cash to pay the credit card debt. In addition, some current ATMs of the bank have added the function of direct cash payment, cardholders can pay credit debt via ATM.
Transfer: Cardholders can transfer by Internet Banking or select the function of credit card debt payment at ATMs (depending on whether the ATM of the issuing bank supports this function).
Payment from other banks: you can transfer from another bank to the credit card account of the card issuing bank to pay the outstanding credit.
Note: When using credit card payment method (cash deposit or bank transfer), if payment is made before 17:00 on working days, payment will be recorded on that day. If the payment is made after 17:00 on working days or on holidays, the payment of credit balance will be recorded by the bank on the next working day.