Be careful with the "double-edged sword"

Recently, public opinion was stirred up about a customer with a credit card debt of just over 8.5 million VND, but after 11 years of not paying the amount spent, the debt had increased to 8.8 billion VND.

The story that has been circulating online for the past few days has also shocked many people. Many people agreed to open a credit card out of respect for the bank staff, because it was just for show. However, many people had to cancel their credit cards to avoid unfortunate consequences.

Currently, customers can use credit cards to pay for most items from tangible products to services such as electricity, water, internet bills, house rent, buying phones, computers, cars or simple daily shopping expenses... With the "spend now, pay later" feature, credit cards are a reasonable choice for customers to better distribute their money and have an additional reserve budget in case of emergency.

Unlike cash, which can only be spent directly, credit cards allow customers to pay in more diverse ways such as: Payment by swiping the card through POS machines at stores, online payment on applications, shopping websites or intermediary links through e-wallets.

When using a credit card for international payments, the bank will automatically convert the foreign currency corresponding to the currency unit that the customer is using with a conversion fee of only 1 - 4%... In short, a credit card is a convenient and smart payment tool on a global scale. Cardholders only need a few simple steps to be able to transact and pay at service establishments with preferential fees and many discount programs.

However, not all customers are qualified for the bank to allow them to open a credit card. For example, for VIB International Bank, the condition for opening a credit card is that the customer has no bad debt in the last 2 years and has a reputable personal credit score. This is the basis for determining the customer's creditworthiness, and is the condition for the bank to consider issuing cards and credit limits.

An employee of VIB Bank Nghe An branch said that credit card holders are given a consumer loan by the bank for 45-55 days without interest or fees (depending on the bank). However, after that period, customers must pay interest at a rate that is generally much higher than the average, the interest rate depends on the type of customer. To avoid bad debt when using a credit card, card users must have a smart spending plan, pay debts on time...

Because the nature of credit cards is consumer loans with high interest rates and fees, be careful when using them; if you need them, understand them, then you can use them effectively and should use them. Otherwise, credit cards are a “double-edged sword”.

Ms. Nguyen Thi H., a self-employed businesswoman in Vinh City, said: Because I have to go to many places, even abroad to collect goods, I opened a credit card a long time ago. However, before the above incident, I had to check my spending activities to see if any of my cards had bad debt.

Notes when using credit cards

Nowadays, most banks issue credit cards. Besides the convenience, credit cards also pose many risks if users do not know how to preserve and use them.

Ms. Nguyen Thi Thu Thu - Director of the State Bank of Vietnam, Nghe An branch, recommends some notes when using credit cards: More and more banks are issuing credit cards to the market, so customers have many choices. However, for smart consumers, their choices often prioritize large and reputable banks.

With brand reputation, stable operating history, wide network, diverse products and services, good quality banks will give you peace of mind when "choosing a face to entrust your gold" and at the same time bring the best benefits and customer care services. In addition, each bank has its own regulations on credit card interest rates. Therefore, when deciding to register to open a card, you should choose a bank or card line with the lowest overdue interest rate.

Ms. Nguyen Thi Thu Thu - Director of State Bank of Vietnam, Nghe An branch

A very correct perception is that credit cards are also money. Therefore, at all costs, do not disclose personal information, information printed on the card such as credit card number, card expiration date, CVV number (security code). Absolutely do not lend the card to others; do not give the card, hand the card to others, including bank employees, to avoid the risk of revealing confidential information.

Customers can also withdraw cash from credit cards like regular ATM cards, however, the fee will be higher and high interest will be charged as soon as the money is withdrawn from the machine. When transacting at an ATM, you need to carefully observe the machine area, card reader slot, and keyboard area before making a transaction.

“Customers need to remember the payment due date. Everyone can forget the payment date. In the short term, the penalty is not a big deal, but in the long term, it is a big problem that can even put you in a vicious cycle of debt. Therefore, try to remember the credit card due date to ensure timely payment” - Director of the State Bank of Vietnam, Nghe An branch noted.