Experience using credit cards for newbies

Credit cards are becoming more and more popular in Vietnam when they can completely replace cash in shopping, online payment, foreign travel ...

This has led to a race of banks to attract customers to open credit cards and offer many attractive incentives for cardholders.

But be careful if you don't understand credit card rules. Someone said that credit card is angel if you know how to manage and use it, but it will be evil if you use it for the wrong purpose.

So how to use credit cards effectively?

On the monthly statement the bank sends to the cardholder always has information on the minimum payment amount and the due date - the last day the bank must pay the minimum amount.

The minimum payment amount tells you the least amount you must guarantee to pay the bank, otherwise you will be charged a late payment fee.

Due date: Most banks in Vietnam have due date of payment 15-15 days from statement day depending on the bank.

Suppose that on November 20, 2016, Citibank will send to customers a copy of the statement and request for payment before December 5, 2016 on which the minimum payment amount is VND 3 million.

That means before December 5, 2016, customers are obliged to "pay at least" VND 3 million to the bank. Otherwise, even if only 1 dong is missing, you will be charged a late payment fee by the bank (usually 4% of the minimum payment amount and the minimum - maximum rate).

The biggest advantage of credit cards is probably that you have the right to use the bank's money to pay for the goods and services you buy at preferential prices and without having to pay any interest for a while. Interest free regulation of banks (usually in Vietnam, the number of days of interest exemption is from 15 to 25 days from the statement date).

You should make the most of this advantage in shopping transactions. But how?

Suppose the ANZ standard credit card has a statement date of 11/20/2016 and the due date is 5/12/2016.

As of 11/19/2016 you are looking to buy a TV for your home, you can buy it on that day. However, you will be listed on the next day immediately. If so you have only 15 days of interest free.

It would be a lot wiser to buy that TV on November 21, 2016. Because of this, the TV you buy will be listed on December 20, 2016 and until January 5, 2017, you will be due. So you have 45 days of interest free.

Looking at the two ways above, we can see, although only two days apart, but the number of days exempted from interest is very different. If you are a good financial manager, you need to grasp this to your benefit.

But why are interest free days important? Still an example of a TV, let's see what two decisions do A and B give?

A: Buy a 10 million VND TV, credit statement total: 10 million VND, due date of payment is December 5, 2016, minimum payment: 1.5 million VND.

A did not have enough money to pay all 10 million, so he only paid 1.5 million on December 5.

For this reason he is subject to the bank's deferred interest rate. This interest rate is applied 2.5% / month. Therefore, only for the TV he bought before, he lost VND 319,000 (from November 20, 2016 - January 5, 2017).

Why is 319 thousand dong? Due to delayed payment transactions will be charged interest from the time the bank disburses for that transaction. Therefore, the interest calculated from the date of the transaction (November 20, 2016) to January 5, 2017 will be 5% over VND 8.5 million within one and a half months.

You should therefore take this issue extremely seriously. Do not misunderstand the interest rate that will apply at the date of deferred payment. If not, you will regret the huge debt.

B: Buy a TV worth VND 10 million, credit statement total: VND 10 million, due date of payment is January 5, 2016, minimum payment is VND 1.5 million.

Because B will only be charged for the purchase of the TV on December 20, 2016 and have 15 days to pay without any interest, so on January 5, 2016 B will pay the debt without losing any One penny for the bank.

You see, that's the difference between a credit card viewer and an angel credit card viewer.

Most banks announce the number of days of interest free (in Vietnam usually from 45 to 55 days). This is the maximum number of days, not any transaction you are exempt from interest on the same number of days.

But if customers do not pay 100% of the amount used on time, the interest rate is calculated very high and ranges from 16% -30% / year. However, this interest is not calculated from the date of deferred payment, but from the date the customer swipe the payment card.

Therefore, when considering a purchase, you need to put it in relation to the bank statement date and payment due date. It is the best way to use your credit card as an effective tool.

Suppose your girlfriend asks you to go to a fancy restaurant in District 1 on the 19th, while you know 20 is your statement date. Please gently tell her: "I'm busy today, 2 more days to you". Maybe she won't be so heavy with you.

In emergency situations, sometimes customers can use credit card to advance at ATM / POS bearing the symbol of international card organization.

However, cash withdrawal by credit card is not recommended by banks, so the withdrawal fee policy is very high.

Most banks in Vietnam apply a cash withdrawal fee of up to 4% of the transaction amount (there is a minimum and maximum withdrawal fee, but the minimum is also up to VND 50,000).

Why is cash withdrawal fee so high? This is because the majority of credit card issuers are all affiliated with VISA or MasterCard, which promotes a cashless world. So when you withdraw money, they will charge very high.

If you do not understand this, then it is your fault. Because once you have used a credit card, there is no reason to convert it to cash for use.

Cash advance transactions will also be charged interest from the moment the transaction is made. And similar to the slow interest rate, the interest rate on this cash loan is also very high.


Credit cards have since changed their lives and brought great convenience to people all over the world.

Vietnam is in the process of integrating into the world economy, so using credit cards will soon become an inevitable trend.

However, using a credit card if not well controlled and knowledgeable about it will be very easy to fall into the situation of overspending even debt.

Therefore, in order to become a smart consumer, card users should balance a reasonable spending budget and always remember the due date to pay fully and promptly, avoid withdrawing and using cash to keep Credit card is always a beautiful little angel in your wallet.

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