Rules for using a credit card – grace period, credit limit and interest rates

The content of the article

• What is a credit card?
• How to make out
• Credit Card Terms
• Credit card activation
• How to withdraw cash
• Credit card lock
• Credit Card Terms
• What is a grace period?
• Credit limit
• Interest for use
• How to pay by credit card
• Cashless credit card payments
• Benefits
• What can I pay with a credit card?
• Where can I pay?
• Bonus Programs
• How to pay off a credit card
• One-time payment before the expiration of the grace period
• Minimum payments provided by the bank
• Pros and cons of using credit cards

Active advertising of Russian banks leads to the fact that the word “credit card” is increasingly used in the vocabulary of the inhabitants of our country. But at the same time, many people do not know how to use a credit card – how it differs from the usual debit card, what are the conditions for calculating interest and how best to pay for the service. Forgetting the payment repayment dates, an inept credit card holder can quickly go into debt, not knowing about all the “pitfalls”.

What is a credit card?

Before us is not just a plastic bank card, but a convenient tool with which the owner can make purchases of goods and make other payments. The money that was used by the client, he must then compensate the bank – in fact, this is a slightly modified form of loan. Russian banks offer a variety of service options, where the amount of credit limits depends on the income of the client.

How to make out

Since such a card is one of the types of banking lending services, in many cases, before signing an agreement, banks carry out underwriting – checking the solvency of the borrower. The client’s income, documented by a certificate of employment, is taken into account – the indicator for the last three months after tax is considered.

For Moscow, this level of salary should be at least 25,000 rubles, for St. Petersburg and the regions of Russia – 15,000 rubles. (Salary card holders have less limits – 15,000 and 9,000 p.). Many banks have offers without checking income, but monthly payments and interest rates for such cardholders will be much higher, which is not convenient for everyone.

Credit Card Terms

A client who decides to get a credit card gets the opportunity to conveniently manage finances. If you still do not know how to use your credit card, then a few basic rules will help you figure it out:

• With this card you can pay for purchases or services using it for cashless payments, but at the same time credit card holders have limited ability to transfer to other accounts.
• Cash withdrawal at ATMs is possible, but very high interest rates (up to 5% and higher) are charged for this, so a competent user will avoid such extra cash costs.
• Each month, the owner receives an extract from the bank, which indicates the amount of the minimum payment and the period in which you need to pay off the debt. If only this amount is repaid, it must be borne in mind that a commission will be charged on the amount of debt.
• It is important that the payment of the minimum monthly payments occurs within the prescribed period, so as not to pay late fees.

Credit card activation

For security reasons, a credit card holder is issued with an inactive card (although some financial institutions, such as Alfa-Bank, may offer to use a ready-made product). There are many different activation options that are not difficult:

• by phone;
• using an ATM;
• via the web interface (for example, Sberbank Online);
• directly at a financial institution.

For example, to activate a Sberbank card, you can use the terminal. To do this, you must:

1. Find the payment terminal of this bank.
2. Insert a plastic card in accordance with the instructions.
3. Enter the pin code from the envelope and wait for confirmation. Card activated!

How to withdraw cash

With all the convenience of plastic as a payment tool, it is not very suitable for cash withdrawals – banks set very high rates for this service (for example, for a card issued by Tinkoff Bank the fee will be 2.9%, but not less than 290 rubles). In general, the operation is simple, for its implementation it is necessary:

1. Insert a card into an ATM.
2. Sign in with a PIN code.
3. Select the cash withdrawal window and enter the required amount.

Credit card lock

A credit card can be blocked if you enter the PIN code incorrectly three times, but a much more common reason for blocking is the loss of plastic. In this case, it is necessary to urgently inform the bank in order to avoid the use of the card by scammers. There are many ways to block, and you can:

• Call the “hot line” (for example, Sberbank offers its customers a toll-free number 8 800 555 5550) and block the card;
• do it online on the website of a financial institution;
• if you use mobile banking, you can do it using SMS message.

Credit Card Terms

In order to avoid unpleasant surprises in the form of accrued interest, you need to know how to use a credit card and not pay too much. For example, untimely repayment of debt will very quickly lead to inflation of debt, which will be much more difficult to pay. But strict adherence to the rules and timely replenishment of the balance makes it possible to use your plastic without interest.

What is a grace period?

The time during which preferential interest-free conditions are in effect is called the grace period – this is the advantage of credit cards over a regular loan. When issuing a credit card, be sure to specify how the grace period is calculated – for each payment separately, or it will be with a single fixed date. The grace period is about 50 days, but the table clearly shows that this period can be longer:

Credit limit

The maximum amount of funds that banks provide to their customers is called the credit limit. This amount is determined depending on the income of the client, his credit history and age – for example, having a salary of 50,000 rubles, you can apply for a limit of up to 300,000 rubles. In addition, banks offer to issue plastic according to the accelerated scheme with the presentation of 1-2 documents, but in this case the “ceiling” will rarely be above 100,000 rubles.

Interest for use

A client who knows how to use a credit card correctly can minimize payment, but you cannot completely avoid it. The meaning of plastic production is to generate income, for example, the conditions for using a Sberbank credit card, in addition to a fixed annual repayment of up to 3,000 rubles, imply a rate of 23.9-27.9%. In this case, the interest is calculated by the formula Pr = Zd x (PS / 365 x Dn / 100), where:

• Pr – interest on the use of credit;
• Zd – debt arising at the end of the reporting period;
• PS – interest rate;
• Days – the total number of days of debt.

For example, a client is going to repay a debt of 10,000 rubles on a credit card with 27.9%, and he exceeded the deadline for a week. Substituting the data in the formula it turns out: Pr = 10 000 p. x (27.9% / 365 x 7 days / 100) = 53.5 rubles. Please note that delays in payments can lead to interest and penalties, which is very disadvantageous to the card holder.

How to pay by credit card

Modern technologies provide the plastic owner with many convenient opportunities to pay by credit card. The most common and popular are shopping in stores. In order to buy a product you like, you need:

1. Make sure that you can use your type of credit card in the store (as a rule, it is Mastercard or Visa).
2. Insert the card into the POS terminal and enter the pin code. In case you have a contactless card, you only need to bring it to such a device.
3. Save check – it can be useful in disputes to cancel the operation.

If you want to learn how to use a credit card for online shopping, the sequence of actions will be as follows:

1. Having picked up the necessary product and putting it in the basket, go to the “Payment for purchases” section.
2. After choosing the necessary type of card, enter its number, surname and name of the owner, validity period and a three-digit code on the back.
3. Confirm your actions with SMS password.

Cashless credit card payments

The convenience of cashless payments with minimal monthly payments quickly made this type of plastic popular with those who have a clue how to use a credit card. Today, most shops, cafes, restaurants and sports centers are equipped with terminals for receiving payments, creating convenient conditions for servicing credit card holders.

Benefits

Plastic shows its positive sides only with cashless payments, helping to solve problems in the event of a temporary lack of money. The interest on the card directly depends on how carefully the bank checked the solvency of the client. At an average of 23-25%, they are a good alternative to “payday” microloans, if you know for sure that you can repay the money to the bank.

What can I pay with a credit card?

The widespread use of plastic forces state organizations, trade enterprises and service industries to keep up with the times, offering convenient payment services. Having a credit card, you can pay:

• television, internet and cellular;
• communal payments;
• taxes
• fines;
• education.

Where can I pay?

Using an ATM (terminal) and online banking further expand the capabilities of those who know how to use plastic, allowing them to pay state fees and purchase tickets. Separately, it should be said about online stores, where in addition to a wide range of goods, affordable prices are also offered, making the use of the card even more attractive.

Bonus Programs

In order to promote this type of plastic on the market, Russian banks are trying to offer users interesting bonus programs designed to receive points depending on the costs incurred. The accumulated points can be spent on purchases or returned in the form of services and discounts. Some interesting offers from different categories are shown in the table:

How to pay off a credit card

In order to properly repay the card debt, you need to focus on several important indicators – in addition to the grace period and interest rate, this is also the size of the minimum payment. It is also important to have a good idea of ​​the possible consequences of late payments (fines and penalties) and additional fees if the credit limit is exceeded.

For example, Raiffeisenbank’s “Standard” tariff, in addition to the credit limit of up to 210,000 rubles and an annual rate of 24%, provides for the following commissions:

• for cash withdrawals – 3% (minimum 325 rubles);
• for delay – 600 rubles;
• for suspension of operations – 300 r.

One-time payment before the expiration of the grace period

If you fully repay your debts before the end of the payment period, then you will not pay interest on the use of borrowed funds of the bank. It should be borne in mind that the preferential service does not include withdrawing money from an ATM – you will still be charged a commission for this operation, so try not to use this service to avoid unnecessary costs.

Minimum payments provided by the bank

Every month, the user of the credit card receives an extract, which shows the amount of the minimum monthly payment. As a rule, this is 10% of the debt and accrued interest – this amount must be paid on time. It is very important to understand that if you pay only the minimum payment, you will remain in arrears, which will be charged interest.

Pros and cons of using credit cards

There are many options for using a credit card, and this can be considered a serious advantage. The advantages include:

• Grace period enabling free use of borrowed funds.
• Convenient form of payment for goods and services.
• Easy to use and more secure.

• The prevalence of payment services.

But do not lose sight of the fact that along with the advantages, this loan product also has disadvantages:

• Difficulty controlling costs for beginners.
• A large number of paid additional services (for example, to issue a Tinkoff card instead of the lost one, will cost 290 rubles).
• Interest rates here are 5-10% higher than conventional loans.