Why do you charge interest on monthly credit card repayments? The reason was finally found

Everyone should know that credit cards allow interest-free overdrafts. Under normal circumstances, you can repay as much as you use, but some friends even accrue interest on their monthly repayments, and they want to know. It's to prove something. Today, I will give you an analysis of why interest is charged on monthly credit card repayments.

Why do you charge interest on monthly credit card repayments?

The interest charged on the monthly repayment of a credit card is related to the cardholder's use of the card and repayment method. There are three common situations, and the interest calculation methods are different.

1. Insufficient repayment in the last period: There are often cardholders who are not overdue, but have not repaid all the outstanding balances. Some have only repaid the minimum amount, or more than the minimum amount. As long as they have not repaid the amount, If the debt is more than 10 yuan (many banks have tolerance services within 10 yuan), interest will be calculated in full from the day the transaction is recorded, and the daily interest rate will be 0.05%, which will be included in the next period's bill.

2. Credit card cash withdrawal in the last period: Credit card cash withdrawal will generate interest, and this interest is calculated in two parts, one part is calculated from the day of cash withdrawal to the repayment date, and the other part is calculated from the repayment date to the next The billing date of one period will be included in the balance of the next period's bill, and interest will be calculated on a daily basis, with a daily interest rate of 0.05%.

3. Apply for credit card installment: There are two types of credit card installment: consumption installment and bill installment. No matter which installment method is used, part of the principal and handling fee must be repaid every month after the application is successful. It can be regarded as charging interest on a monthly basis. The monthly rate is determined by the number of installments. Each period is between 1 and 1, depending on the bank.

The above is the relevant introduction to "Why do you charge interest on monthly credit card repayments?" In short, you can compare the above three situations to find out why there is interest on credit card repayments, and then repay according to the outstanding amount shown on the bill. If you do not repay the interest, you may be overdue even if you only pay the principal.

My credit card has no installments and no overdue repayments. Why does interest still accrue?

There are three possible reasons why credit cards generate interest. One is that the current bill has not been paid off, and a few dollars or cents may have been missed, which will result in full penalty interest. The other option is to withdraw money, which will definitely accrue interest. The third situation is that you forget to repay a small amount of the loan.

1. What factors affect credit card interest?

Credit card interest is directly affected by: interest calculation base, daily interest rate, interest calculation days, etc.

1. Interest rate

Generally, the daily interest rates of various banks are different. When the consumption amount is the same, the interest rate directly affects the amount of interest.

2. Interest accrual days

There are three important dates when using a credit card: billing date, due repayment date and consumption date. These three dates affect the interest accrual days. If you consume on the day before the bill date, the interest-free period is the shortest; if you consume on the bill date, the interest-free period is the longest.

Consumption date: the date when the user swipes the card to make a purchase

Billing date: the final date of all consumption in the current period

Repayment due date: the date specified by the card-issuing bank. The last date by which a cardholder should repay their full or minimum repayment amount.

3. Interest accrual base

The interest accrual base is divided into two situations:

(1) If the repayment is made in full on the due repayment date, no Interest;

(2) If only the minimum repayment amount is repaid on the due payment date, interest will be calculated from the consumption date.

2. How to calculate credit card interest?

Interest = interest calculation base × daily interest rate × number of interest calculation days

1. Look at the interest rate and interest calculation method of credit card interest. Usually banks will calculate credit card interest compound interest on a monthly basis.

2. Calculating compound interest on a monthly basis means adding the principal and interest of the previous month and then calculating the interest of the next month, and so on.

3. If even the minimum repayment amount is not reached before the latest payment date, late payment fees will be charged.

4. The late payment fee will be charged based on 5% of the unpaid portion of the minimum repayment amount.

3. When using a credit card for transactions, there is generally an interest-free period of 20-50 days. If all outstanding balances are paid off within the interest-free period, no fees will be incurred.

However, interest (handling fees) will be charged in the following four situations:

1: Cash withdrawal interest

That is, withdrawing cash directly from an ATM machine. This method will generate two types of fees, one is interest and the other is handling fee. At present, the interest rate of all major banks is RMB 50,000 per day, and the handling fees vary from bank to bank, generally ranging from 1 to 3.

2: Interest accrued after overdue payment

If the payment is not repaid on time and the payment is overdue, the bank will charge interest from the day you swipe the card. The interest is generally 10,000 yuan. 5 yuan a day, until the day you repay in full

3: Installment interest

This kind of installment generally refers to being divided into a fixed number of periods.

The current installment ranges of various banks are generally 3, 6, 9, 12, 24 and 36 phases. This number of installments is not uniform among banks. For example, Shanghai Pudong Development Bank only gives you a maximum of 24 installments, while some banks can give you 36 installments.

Friends who need to handle this business must consult the bank for details.

The installment interest rate (now called installment fee by many banks) is currently not uniform among various banks. The general range of each bank is between 0.5 and 0.8 per month, with equal principal and interest repayments.

4: Minimum repayment interest

Each bank now has a minimum repayment. Under normal circumstances, if you spend 10,000 with a card, calculated based on 10, it is a minimum repayment of 1,000. . If you repay one thousand before the repayment date, your credit report will be normal at this time and it will not be considered overdue.

Interest is charged on the unpaid portion of the full repayment, starting from the day the card is swiped. There is no interest-free period, and the fee is still RMB 50,000 per day.

Why do credit cards accrue interest

Nowadays, credit cards play an important role in people’s daily lives. Many cardholders will take out their credit cards to pay for purchases as soon as possible. Enjoy the interest-free period. However, many cardholders often find that interest accrues when they pay off their credit cards. So why do credit cards accrue interest?

1. Overdraft cash withdrawals: including ATM cash withdrawals and credit card cash transfers, this is the most common situation in which interest is generated. After all, credit cards are only interest-free for overdraft purchases. Interest will be calculated on a cash withdrawal at a daily interest rate of 0.05% from the date of entry into the account, and compound interest will be accrued on a monthly basis. Therefore, if you use a credit card to withdraw cash before overdrafting, the repayment is not just the principal, but also the interest.

2. Failure to repay in full: Regardless of whether the payment is overdue or the minimum payment is made, interest will accrue as long as the full payment is not made and the bill installment is not processed. of. And this interest is not calculated from the date of repayment, but is calculated in full from the date the consumption is recorded. The daily interest rate is 0.05%. It is also a daily interest and compound interest is calculated monthly.

3. Purchase of foreign exchange with a credit card: After using a card for overdraft consumption, you usually need to purchase foreign exchange in RMB for repayment. Many banks not only allow you to purchase foreign exchange with debit cards, but also use credit cards to purchase foreign exchange. Cardholders can use the credit card RMB account in their own name to purchase foreign exchange and repay it, which is regarded as a RMB overdraft withdrawal, and interest will also be charged.

It should be noted that after interest accrues on a credit card, it must be paid off in time, otherwise the interest will compound as time goes by.

Why do you charge interest on the monthly repayment of a credit card?

The interest charged on the monthly repayment of a credit card is related to the cardholder's use of the card and repayment method. It is common. There are three situations, and the interest calculation methods are different.

1. Insufficient repayment in the last period: There are often cardholders who are not overdue, but have not repaid all the outstanding balances. Some have only repaid the minimum amount, or more than the minimum amount. As long as they have not repaid the amount, If the debt is more than 10 yuan (many banks have tolerance services within 10 yuan), interest will be calculated in full from the day the transaction is recorded, and the daily interest rate will be 0.05%, which will be included in the next period's bill.

2. Credit card cash withdrawal in the last period: Credit card cash withdrawal will generate interest, and this interest is calculated in two parts, one part is calculated from the day of cash withdrawal to the repayment date, and the other part is calculated from the repayment date to the next The billing date of one period will be included in the balance of the next period's bill, and interest will be calculated on a daily basis, with a daily interest rate of 0.05%.

3. Apply for credit card installment: There are two types of credit card installment: consumption installment and bill installment. No matter which installment method is used, part of the principal and handling fee must be repaid every month after the application is successful. It can be regarded as charging interest on a monthly basis. The monthly rate is determined by the number of installments, ranging from 1 to 0.75 per period, depending on the bank.

Credit card interest accrues:

① Overdue credit card, credit card has a billing date and a repayment date. Generally, 20 days after the billing date is the credit card repayment deadline. If the credit card exceeds the repayment date, If the repayment is overdue, interest will accrue and your credit will be affected. The penalty interest incurred by an overdue credit card is five ten thousandths of the overdue amount. If you use a credit card to spend 10,000 yuan and it is one day overdue, the penalty interest incurred will be 5 yuan.

②Cash withdrawal with credit card. Cash withdrawal is one of the functions of credit card. If the cardholder has short-term financial needs, he can withdraw cash through credit card. The higher the credit card limit, the higher the amount of cash withdrawal. The cash withdrawal limit It will not exceed 50 of the credit card limit. Credit card cash withdrawals will generate interest and will also charge a certain handling fee. The handling fees charged by each bank are different, but the interest generated is 50,000% of the cash withdrawal amount. If you withdraw 10,000 yuan in cash, the interest generated every day is 5 yuan.

③Credit card installment, credit card can be repaid in up to 24 installments. Installment will incur handling fees, which is actually the interest charged. The longer the credit card installment period, the more handling fees will be charged. Credit card installment fees are also one of the sources of bank credit card business income, and each bank's credit card installment fees are different.

The method of using a credit card is very simple. You can swipe the card to make purchases. After consumption, you must repay on time. Interest or handling fees will be incurred for overdue payments, cash withdrawals and installments.

Why is there still interest if the payment is made within the date of swiping the credit card bill?

The interest charged on the monthly repayment of the credit card is related to the cardholder's use of the card and repayment method. It is common. There are three situations with different interest calculation methods.

First, the full amount of the repayment was not paid in the early stage

There are often cardholders who do not repay the loan on time. They do not need to repay the entire amount, and some only repay the minimum amount, or more than the minimum amount. The minimum amount is more than the minimum amount. As long as the outstanding debt exceeds 10 yuan (many banks have tolerance services within 10 yuan), interest will be accrued in full from that day, and the daily interest rate will be 0.05%, which will be included in the next bill. .

Second, withdrawing cash from a credit card in the last period

Withdrawing cash from a credit card generates interest. The interest is calculated in two parts. One part is from the date of cash withdrawal to the date of repayment, and the other part is from the date of cash withdrawal to the date of repayment. From the date of repayment to the date of the next period, it will be included in the next period's bill, that is, interest will be calculated on a daily basis, with a daily interest rate of 0.5%.

Third, apply for credit card installments

There are two types of credit card installments: consumption installment and bill installment. No matter which one is applied, a part of the principal and handling fee must be repaid every month after the application is completed. , which can be understood as charging interest on a monthly basis. The monthly interest rate is determined by the number of installments, ranging from 1 to 0.75 per period, depending on the bank.

Why is there still interest when the credit card is paid off in full?

The credit card is fully paid off, but there is still interest, because the user repays the interest on the current balance and the bill that has been issued. As long as any amount remains outstanding, interest will accrue on that amount.

Therefore, if you want not to pay any interest, then the user needs to repay the amount that has been withdrawn in full. If there is no full repayment, and the repayment funds are greater than or equal to the minimum repayment, it will be regarded as the user's minimum repayment. .

The minimum repayment will accrue interest, but early repayment can effectively save interest. If you don’t want to pay too much extra interest, you can choose to repay in advance.

Credit cards are divided into credit cards and quasi-credit cards. Credit cards refer to credit cards in which the cardholder has a certain credit limit and can consume within the credit limit and then repay; quasi-credit card It refers to a quasi-credit card in which the cardholder deposits a certain amount of reserve fund as required. When the reserve account balance is insufficient to pay, the cardholder can overdraw within the prescribed credit limit. The so-called credit card generally refers to a credit card only.

Credit cards are issued by commercial banks to individuals and organizations. They can use them to shop and consume with special organizations and deposit and withdraw cash from banks. They are special carrier cards with consumer credit. They are in the form of a card with the card issuing number printed on the front. Cards with bank name, validity period, number, cardholder name, etc., and a magnetic stripe and signature strip on the back.

A real credit card has the following characteristics: it is not encouraged to deposit cash in advance, consume first and repay later, enjoys an interest-free payment period, can repay in installments independently (with a minimum repayment amount), join VISA, MASTER Wait for international credit card organizations to make it universally applicable.

There are five major credit card brands in the world, two major organizations: VISA International and MasterCard International, as well as American Express International Co., Ltd. (America Express) and Diners Club. ), JCB Japan International Credit Card Company (JCB) five professional credit card companies. There are also some regional credit card organizations in various regions, such as EUROPAY in Europe, UnionPay in China, United Credit Card Center in Taiwan, etc.

The choice of credit card is very important. Nowadays, many commercial institutions have bundled cooperation services with banks. For example, you can apply for a joint credit card between a department store and the corresponding bank, and you can spend points here as a member and earn points. Discounts; or some cards can provide discounts at designated merchants, including dining, movies, towing services, etc. There are various names, and you can choose freely according to your own needs.

Credit cards have two functions: overdraft and cash withdrawal, but cash withdrawals require a certain percentage of handling fees, and even if you deposit your own money into it, you will be charged. Therefore, it is not cost-effective to use or use it as a passbook.

This is the end of the introduction on why credit cards have interest and why credit cards have interest income. Have you found the information you need?