Why do banks repeatedly remind users to pay for credit card installments? Obviously, the bank's tireless efforts to send text messages every month to remind credit card users to make installment repayments is not out of good intentions to reduce users' repayment pressure, but to earn more handling fees. For credit card issuing banks, installment fees are their main source of income. If credit card users do not make installment payments, banks’ interest in promoting credit cards will probably be greatly reduced. Take the bill above as an example. Although the handling fee per period does not seem to be much, if calculated based on the annualized interest rate, the handling fee for making 3 installments will be as high as 6 installments. The handling fee will be as high as 6 installments. This is obviously much higher than the average bank loan interest rate. Why would banks not want to make such easy money? Of course, banks can go out of their way to repeatedly remind users to make installment repayments, but whether they do so or not depends on the credit card users themselves. Normally, if there is no repayment pressure, it is best not to make installment repayments, because it will be very uneconomical. Some people may think that by making installments, they don’t have to pay back the money temporarily. They can use the money to make financial investments and then return it to the bank after making money. People who have this idea can only say that they are overthinking, because what kind of investment and financial management can guarantee an expected return rate of more than 10%? If the expected rate of return cannot reach more than 10%, it will be a loss. However, some people may worry that if they continue to ignore the bank's reminders and do not make installments, it will affect the credit card limit increase, or whether the credit card limit will be reduced.
Will not making installments affect the quota increase or reduction? First of all, the conditions for increasing the credit card limit of each bank may be different. Of course, if you can make more installments, it will help to increase the credit card limit. After all, the main purpose of banks increasing credit card limits to users is to make more money from users, and installment fees are an important source of income for credit card issuing banks. The more installments the bank makes, the more money it makes. Therefore, if you make more installments, banks will be more willing to increase the credit limit for credit card users. From this point of view, not making installments will still have a certain impact on credit card limit increases. Of course, this does not mean that if you do not make installments, there will be no chance of a quota increase. It is just that the chance is smaller than the chance of making more installments. In addition, it does not mean that the more installments you make, the faster the credit limit will be increased, because if you make too many installments, the bank may suspect that the user's repayment ability is insufficient, so it will not be willing to increase the credit limit. Secondly, the possibility of being derated if you don’t make installments should be relatively small. Because not making installments means that every bill can be paid on time, which will leave a good credit record in the bank. For a user with good credit, what reason does the bank have to reduce the limit of his credit card? Moreover, just because a user doesn’t do installment now, doesn’t mean he won’t do it in the future. As long as the user is still using his credit card, the bank will have the opportunity to make money from the user. If a bank really wants to reduce the credit card limit of users with good credit for no reason, it will probably make people feel discouraged and eventually abandon them. Then the bank will have nothing to think about.