Credit card payment brings many benefits to users

Wanting to replace her old, outdated phone with a new one, Ms. Le Hang went to a mobile phone store on Hung Vuong Street, Hue City to buy a phone on installments.

According to Ms. Hang's research, if paying in installments through financial companies with a loan of 20 million VND, the interest rate fluctuates between 15 and 20%/year, and the installment period is also quite flexible from 3 to 36 months. However, this interest rate is quite high, so she is still hesitant. Introduced by an acquaintance, she learned about the bank's credit card installment service, so she registered for installment payment via card.

Ms. Hang said, if I pay and register for installments via credit card, I will only borrow installments with 0% interest. According to the store staff, thanks to the unit's association with the bank, I can get that incentive. For non-affiliated stores, in addition to the card swiping fee, the bank will charge interest on the installment loan and the interest rate depends on the loan, as well as the installment period. Instead of paying the entire amount of the phone or paying in installments with high interest, I will divide this amount evenly over 9 months (according to Ms. Hang's installment payment needs) and pay monthly via credit card. When the statement deadline comes, I only need to pay the outstanding balance divided by month, so it will be easier for me to balance my income and expenses.

Contacting some banks to find out, we learned that the 0% interest installment payment method will be applied when customers use the services of stores that are partners of the credit card issuing bank. If customers use the services of stores that have a 0% installment payment program, but are not partners of the credit card issuing bank, there will be a conversion fee depending on the bank. The installment payment amount will be divided equally into the installment payment periods according to the registration needs such as: 3, 6, 9, 12 or 24 months... and the conversion fee will be added to the first month's installment payment. Thus, in the first month of installment payment, customers will have to pay the conversion fee and the installment payment amount that has been installmented monthly. In the second month, customers only pay the installment payment that has been installmented until the loan is completed.

Users need to use smart credit cards

In addition to registering for installment payments through the system linking the bank and partner stores, customers can also register for installment payments for personal expenses such as insurance premiums, tuition fees, credit card payments, etc. on the banking app. For these transactions, each bank will apply a separate policy of calculating or not calculating interest.

In fact, using a calculated form of payment via credit card will help reduce pressure on users when they can pay for expenses and pay later within 45 days according to the regulations of each bank. In addition to receiving incentives related to 0% installment payment when purchasing at stores affiliated with the bank, most banks in the area have implemented programs to accumulate points when shopping and paying via credit card. Users can take advantage of these points for transactions such as phone card top-up, annual fee payment or shopping on shopping sites affiliated with the bank...

However, in addition to the benefits and convenience of paying in installments by credit card, the use and registration of installments by card also need to be considered based on financial capacity. When registering for installments by credit card, customers must pay in full the monthly installments, otherwise they will be subject to penalty interest and affect their credit profile. Therefore, before paying in installments, users need to balance their personal finances, ensuring the ability to pay monthly installments to avoid penalty interest.

In addition, using credit cards haphazardly will also leave many consequences, especially the situation of uncontrolled spending that can easily lead to financial plans being affected. Many people register for credit cards without needing it, or for the sake of it... which is also quite risky when the current annual fees applied by some banks for credit cards are quite high.

Article and photos: Hoang Loan