I work in a factory. My parents' home was renovated this year, and I bought electrical appliances with my credit card. The total amount is 24,000 yuan. The customer service of CCB called me and said that it was very cost-effective to stage, only 2 yuan a day. I don't think 2 yuan is too much, so I readily agreed. But after receiving the bill, I found that my debt was obviously 24,000 yuan, but the bill showed that I owed 25,728 yuan. Why is the installment principal owed more and more?
Lawyer Dai told Miss Chen that there was no problem with the amount. Indeed, the principal will go up, because the handling fee after installment is recorded according to the principal. The bank didn't make a calculation mistake, but just hid some facts from you, which induced you to ignore the real cost.
The same thing must have happened to you. Every time you spend a lot of money with a credit card, within 24 hours, the bank staff will sell you the "installment service". The voice is sweet, just answer directly, and the phased business will be completed instantly.
When you are expecting a low interest rate of "zero interest rate, only 0.0% handling fee" and wait for the bill to be issued last month, reality will often give you a loud slap in the face.
You will find that the credit card installment fee is not as good as the advertised "zero interest and low handling fee". Low cost is just your wishful thinking. 12% to 24% installment fee will always crush all your expectations at the moment when the bill is issued.
China Construction Bank bill installment advertisement
Many banks declare in their marketing that "zero interest and low handling fee can handle installment business". We will immediately intuitively think that the bank's installment business may really be for the benefit of cardholders, making money at a loss.
On the other hand, according to the annual financial statements disclosed by banks, the installment business of credit cards has accounted for more than 40% of the total credit line of credit cards. And most banks put credit card installment business in the first place. Driven by the overall situation, the scale of installment business of some banks has doubled.
The growth of business has brought about a substantial increase in profits. Nowadays, the profit brought by credit card installment business has become the largest part of the income structure of commercial banks, and it is also the growth point of bank credit card business profit.
The bank's "zero interest and low handling fee" business has become the biggest contributor to bank profits. Lawyer Dai can't help but think that this is an obvious paradox, because cardholders don't have to pay interest, but only need to pay a lower handling fee. How does the bank's installment business bring high income?
Admittedly, Dai believes that the financial data published by banks can't be wrong. Relatively speaking, the problem must be "zero interest and low handling fee".
Changing the "vest" on interest and expenses is really beyond the understanding of most people.
The "zero interest and low handling fee" claimed by bank customers can be understood as "no interest, only low handling fee". Then, whether the handling fee belongs to interest or expense has always been the focus of dispute between cardholders and banks.
Lawyer Dai believes that after the bank issues a credit card, the cardholder will use the funds by overdrawing the credit card. Then, all expenses incurred by the cardholder in handling the installment business of consumption limit shall be subject to the credit limit of the credit card. In other words, banks get returns from borrowers' consumption behavior by providing loans, so this part of income has the nature of interest. So, in essence, the handling fee is interest.
There are other purposes to call the above bank charges "handling fees" rather than "interest".
For the marketing of credit cards, it is generally difficult for domestic people to accept "loan consumption", so it is easier to accept the conversion of interest into installment fees, which will help reduce the market expansion of installment business.
For commercial banks, with the gradual advancement of interest rate marketization reform in China, non-interest income has become the key assessment index of banks. Converting installment interest into handling fees can make it easier for banks to complete the assessment indicators.
So the so-called installment fee is actually interest, just under a different name.
In fact, most credit card holders don't care much whether banks charge interest or handling fees. Because they are all costs that need to be spent, the only thing to consider is whether it is more or less, what is the name and which category it belongs to, and it doesn't matter.
Lawyer Dai summed up the following formula to calculate the user's installment business cost according to the description of installment products in official website of several banks.
Calculate the "apparent cost" according to the bank's propaganda.
According to the above formula, let's calculate the installment fee proposed by Miss Chen at the beginning of this article.
Lawyer Dai extracted the following monthly fee standard of bill installment from the introduction of official website installment products of CCB, as shown in the following figure.
China Construction Bank bill installment monthly fee standard
According to the installment of CCB credit card 12, Miss Chen's credit card was overdrawn by 24,000 yuan, and she applied for installment of 12. According to the published installment product rate table (as shown above), after installment, the installment fee for each installment is 144 yuan (0.60% of 24,000 yuan), so the monthly repayment amount is 2 144 yuan (the installment principal is 2,000 yuan, and the installment fee is 144 yuan).
In Miss Chen's mind, the monthly installment fee of 144 yuan is the cost of handling the credit card overdraft of 24,000 yuan. Furthermore, because there is a huge difference between the handling fee of 144 yuan and the principal of 24,000 yuan, Miss Chen thinks it is cost-effective in a sense.
The customer service staff of the bank further persuaded Miss Chen to pay 0.6% for each issue and 7.2% for the whole year. If the overdue period is caused by non-staging, even if the liquidated damages are not calculated, the light interest is 18.25%. No matter how you compare it, staging is the best choice.
Lawyer Dai thought of Miss Chen's advertisement, which was attracted by staged music at that time: "Staged music is 10,000 yuan, and only 2 yuan fee is charged every day". She did it without thinking. Miss Chen and lawyer Dai said, "A subway station in Shenzhen costs 2 yuan. What is the significance of staging? "
The real annualized rate of credit card installment is much higher than the apparent cost you can see.
The superficial rate of Dai analysis seems to be very low, but one detail that cardholders often ignore is "not only to pay the handling fee, but also to pay the principal". This repayment method is called matching principal and interest in the financial industry, that is, the principal and total expenses are divided into certain periods, and the repayment amount in each period is the same.
According to the above analysis, we know that:
Shangshi
According to the analysis and comprehensive calculation, the actual annualized cost of Miss Chen is 13.03%. Therefore, its real cost has reached 3 127 yuan, which is far from the bank's claim of 1728 yuan. The actual cost is more than 80.9% higher than the apparent cost.
Lawyer Dai found that the so-called low-fee installment fee was ridiculously high after counting the bill installment fee data of six banks.
Comparison chart of nominal interest rate and real interest rate promoted by the bank in stages (this picture is hand-painted by lawyer Dai, please indicate the source)
According to the credit card installment fee table summarized by lawyer Dai, the apparent fees generally claimed by banks are far lower than the actual fees that customers need to pay.
As China Merchants Bank, the annualized rate of some installment business expenses is as high as over 30%, which is close to what people call "three-point interest". The installment interest rates of other banks all reach "1 interest" to "1 interest -5".
It is these fees that make cardholders unconsciously accept and silently eat into the income of cardholders. As Miss Chen said at the beginning of this article, "the principal of credit card is more after installment".
Lawyer Dai only investigated six banks, both state-owned joint-stock banks and commercial banks. They are very representative and can be said to be a concentrated model of the banking industry. The issuing bank uses the lower nominal interest rate to promote the cardholder to handle the installment business, and charges nearly double the fee when settling.
Credit card installment business is a kind of "delicious poison", which tastes good but toxic.
Is it high or low for the cardholder to settle in advance after the installment?
After consulting a number of banks, Mr. Dai said that no handling fee can be settled in advance. Lawyer Dai calculated according to the formula that early repayment will increase the real cost of installment payment. It was found in the survey that all banks at this stage stipulate that once the installment business is successfully handled, the installment fee will be included in the form of principal at one time. If prepayment is required, the service fee paid before cannot be refunded, and prepayment can only be completed after the unpaid service fee is repaid together.
In the previous case, Miss Chen had paid off the loan for three months. If it is necessary to close the business ahead of time, Miss Chen will have to pay an additional 9-month installment fee, that is, 1.296 yuan (1.444 yuan× 9 months), before she can complete it. Based on comprehensive calculation, Miss Chen's annualized installment interest rate is at least 18%, which is equivalent to paying the bank "1.5" interest every month.
Although the annualized interest rate of installment business is high, it is still a low-cost financial product compared with credit card revolving interest rate or overdue interest and liquidated damages. As long as the cardholder is clearly explained and the real situation is listed, both the cardholder and the bank can benefit.
However, banks use the "superficial rate" propaganda to induce cardholders to handle installment business at a cost lower than the real cost, which is suspected of inducing and deceiving cardholders. This misleading behavior directly violates the cardholder's right to know.
Therefore, for banks, it is an obligation to publicize the real rate voluntarily, so that cardholders can voluntarily handle the installment business on the premise of knowing the real rate. Only in this way can the rights and interests of cardholders as "consumers" (such as the right to know) be truly protected. In addition, cardholders can also accept this financial product and reasonably avoid overdue risks.
Other businesses similar to installment business also have more or less problems. Therefore, by standardizing legislation, improving the information disclosure process of financial products, and establishing a national standard mechanism for financial products, cardholders can know about financial products and have the ability to choose, so that cardholders can avoid falling into debt crisis because they are unfamiliar with products.
Lawyer Dai is the winner of today's headline legal gold medal in the second season of Judge Pu.
Related Q&A: Related Q&A: Is the credit card installment fee high? Installment service fee is the fee charged by the bank to provide customers with services to repay the overdraft amount of credit cards in installments. Credit card installment business is actually a short-term financing service provided by banks for cardholders. It should be said that the credit card installment fee at prime Bank is extremely high, and you may never want to installment again after calculation.
Talk about interest.
Repayment by installments, similar to repayment of equal principal and interest, adopts compound interest. Friends who have bought a house in this way are familiar with it. Banks like to cheat friends who don't understand the principle of compound interest in this way, because you are paying interest and the principal is still slow. Although the monthly repayment amount remains the same, the principal is decreasing, resulting in low utilization rate of funds. Therefore, if the interest is calculated, the overall interest paid will be much higher.
In order to stimulate cardholders to use the method of charging fees instead of interest, some banks seem to be preferential, but in fact they just turn interest into fees and change their names.
Case calculation
For example, the credit card bill is 65,438+00,000 yuan, which is calculated as 0.6% after monthly bank discount of 65,438+02, and the annual interest rate of Xiaobaiyi is 0.6% * 65,438+02 = 7.2%. I am very happy. Congratulations, you are trapped in the bank.
Remember the two formulas here:
(1) If the handling fee is charged on schedule, the actual annualized interest rate = single handling fee rate * number of periods *24/ (number of periods+1).
(2) For the first lump sum payment, the actual annualized interest rate = total handling fee rate *24/ (number of periods+1)/( 1- total handling fee rate).
If ten thousand bills are divided into 12 installments, the principal to be repaid each month is 833 yuan, and the handling fee is 60 yuan. One month's principal plus interest is 893 yuan. Note that the monthly fee to be repaid is 10000*0.6%=60 yuan, and that's all for each month. Even if your principal is repaid soon in the last month, you still need 60 yuan's handling fee. At this time, the rate is extremely high, much higher than the 0.6% you see.
In fact, the actual interest rate in the last month is 60/833=7.2%, and this is the monthly interest rate, not the cost of using 833 yuan a year.
So what is the actual monthly capital utilization rate of the equal principal and interest repayment method?
( 10000+9 167+8334+750 1+? +1670+837) divided by 12 months =54 19 yuan, the actual annual interest rate by installment is the total interest 720 yuan /54 19 yuan = 13.28%, which is the actual interest rate of credit card installment, which has more than doubled.
Remember this rule: the actual interest rate of one-year installment is twice the rate multiplied by 12, and then the longer the installment, the higher the rate, because the handling fee you need to repay every month is unchanged.
In fact, besides credit card installment, there are many installments in our life. For example, if you usually buy online, there will be things like commodity installment and white installment, and the real interest rate of these installments is actually higher than you look.
Finally, let's summarize the three pits of credit card installment: first, no matter how much principal you pay back, the monthly handling fee is calculated according to the total amount and is fixed; Second, the method of matching principal and interest increases the interest we need to pay to the bank; Third, charging a monthly fee reduces the actual real interest rate and misleads consumers.
We assume that no interest is charged, so if we simply calculate the handling fee, the actual annualized rate of the handling fee generated by credit card installment is also very high.
Don't pay by credit card unless you have to.