The credit card issuer will stipulate the relevant clauses of liquidated damages in the credit card contract, including the calculation method of liquidated damages and the collection ratio. When the cardholder defaults, such as overdue repayment and minimum repayment, the bank will charge liquidated damages as agreed.
The main purpose of liquidated damages is to make up for the losses suffered by the bank due to the cardholder's breach of contract, and urge the cardholder to repay the loan on time and abide by the credit card usage regulations. The amount of liquidated damages is usually determined according to the breach of contract and the contract.