How is interest calculated for overdue credit cards?

Credit cards generally have an interest-free period ranging from 20 to 50 days. If the cardholder does not repay during this period, interest will be charged on the overdue balance. Currently, credit card interest is calculated There are two ways, one is to calculate interest in full and the other is to calculate interest in installments.

Full interest calculation

Full interest calculation is also called full penalty interest. It means that the cardholder does not repay the entire amount owed before the repayment date. From the consumption The interest will be calculated at the rate of 0.05% per day until the full amount is paid off.

For example, the bank statement of a credit card is July 7th, and the repayment date is the 25th of this month. You should repay 1,000 yuan this month, and the minimum repayment amount is 100 yuan. If it is on the 25th, I did not repay the loan before the 28th, but repaid 200 yuan on the 28th.

The calculation method of recurring interest is:

1000×0.0005×28+(1000-200)×0.0005 ×10=18

Calculation method of late payment fee:

100×0.05×3=15

Interest calculated in installments

Increments Interest is calculated on the overdue portion that has not been repaid. It is also calculated cyclically from the date of consumption to the date of repayment, according to the interest calculation method of 0.5% per day. Currently, there are only three banks: Agricultural Bank of China, Shanghai Pudong Development Bank, and Industrial and Commercial Bank of China. Interest calculation is implemented in installments.

In addition to penalty interest, credit cards also charge liquidated damages

Except for ICBC, which is based on 10% of the minimum repayment amount, Guangfa Bank’s income is based on the minimum repayment of the unpaid portion. In addition to 10% of the minimum repayment amount, other banks basically charge liquidated damages based on 5% of the unpaid portion of the minimum repayment amount.

In terms of collection of liquidated damages, some banks have set income limits. Among them, the minimum amount of liquidated damages for China Guangfa Bank, Industrial Bank and CITIC is 20 yuan. In other words, even if the cardholder defaults overdue, The deposit is five yuan, and a penalty of at least 20 yuan is also required.

Credit cards will have a minimum repayment amount, which is usually 10% of the monthly bill. As long as the minimum repayment amount is paid, there will be no late payment fees and it will not affect your personal credit score. If the bill for a certain month is not repaid, a late payment fee will be incurred, which is the consumption amount × 10% × 5%. The calculated amount is the amount to be paid.

How to calculate overdue interest on credit cards?

Interest expenses are usually calculated based on daily interest rate of 0.5%.

Some banks stipulate that within 15 days from the accounting date, the daily interest rate will be calculated at 0.5%, and if it exceeds 15 days, the daily interest rate will be calculated at 10%. If it exceeds 30 days or the overdraft amount exceeds the prescribed limit, Calculated based on the daily interest rate of 15/10,000, the longer the arrears are, the higher the penalty interest will be.

For example: the billing date is the 10th of each month, the final repayment date is the 28th, and 10,000 yuan was consumed on June 11th, and it is July 28th, then the bill on August 10th will be The recurring interest expense is: 10,000 yuan × 0.5‰ × (July 28 to June 11) × 0.5‰ × (August 10 to July 28) = 293.5 yuan.

If the cardholder fails to repay even the minimum repayment amount, in addition to recurring interest charges, there will also be a late payment fee calculated at 5% of the unpaid portion of the minimum repayment amount. If you repay 500 yuan, the late payment fee is (1,000 yuan ~ 500 yuan) × 5% = 25 yuan.

Extended information:

The main function of the repayment date is for banks to determine whether the cardholder has a malicious overdraft tendency and to determine the cardholder's financial status. Therefore, repayment after the final repayment date will inevitably result in an overdue record.

When a credit card (credit card) holder chooses the minimum repayment method or uses the card beyond the credit limit approved by the card-issuing bank, he will no longer enjoy the interest-free repayment period and must pay the unpaid portion of the loan. Overdraft interest is calculated based on the prescribed interest rate from the bank accounting date.

Baidu Encyclopedia - Credit Card Repayment

How to calculate interest on overdue credit card repayment

The interest is calculated at 0.05% starting from the record date, and there are also late payment fees . It is best to repay within the grace period of China Merchants Bank. If you exceed the grace period and have the ability, choose to repay in full, then there will be no fee. Otherwise, 0.05% daily interest will be charged, plus late payment fees.

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The consequences of an overdue credit card:

1. Overdue credit card fees are required. When the cardholder fails to repay the credit card before the due date (inclusive) When the repayment or the repayment amount is less than the minimum repayment amount, the fee payable to the card-issuing bank is required.

2. After a user uses a credit card to overdraft, there is generally an interest-free repayment period ranging from more than 20 days to more than 50 days. If the cardholder's repayment is overdue, then all the cardholder's last month's repayments will be lost. Fees no longer enjoy the bank's interest-free treatment, and the recurring daily interest rate is as high as 0.5%, which means the annual interest rate reaches 18%.

3. Credit card overdue repayment records will enter the central bank’s credit reporting system to generate bad credit records.

4. If the credit card is not repaid for more than 3 months, the bank will ask a lawyer to issue a lawyer's letter to the user and file a lawsuit. The litigation costs will be borne by the cardholder.

5. Criminal liability for malicious overdraft. According to Article 196 of my country's Criminal Law and relevant judicial interpretations, malicious overdraft refers to the cardholder's behavior of overdrafting beyond the prescribed limit or within the prescribed period for the purpose of illegal possession and failing to return it after being called by the card issuer. Those who maliciously overdraft and engage in credit card activities will be held criminally responsible for credit card crimes and may be sentenced to a term of not more than 5 years or short-term imprisonment, and a fine of not less than RMB 20,000 but not more than RMB 200,000.

If your credit card is overdue, please note that there is a grace period of 1 to 3 days after the credit card is overdue. As long as you pay off the debt in time within this period, it will not affect your personal tax collection. Of course, the specific time is subject to the announcement of each bank.

If the loan is overdue for more than three days, some online loan platforms will begin strong collection efforts, usually through frequent phone calls and text messages.

The overdue credit card repayment record can be completely eliminated after 5 years, but if the repayment is made on time within 24 months, the previous bad credit record will be refreshed.

How to calculate overdue interest on a credit card

1. How to calculate the interest on an overdue credit card

If a credit card is overdue for repayment, the interest will be divided into two situations:

1. The overdue interest on bank credit cards is generally 0.05% per day. The interest is calculated at an interest rate of 0.5% per day, and then compound interest is calculated at an interest rate of 0.05% until the cardholder pays off all until.

2. Interest will be accrued on the full amount of the overdue balance, and compound interest will be charged on a monthly basis until the cardholder repays it in full. Currently, if a credit card is overdue, the bank will issue agreed interest for 5 months based on the cardholder's failure to repay the minimum repayment amount for more than 3 months.

2. What to do if your credit card is overdue

1. Quick remedy for overdue credit card

(1) If you encounter an overdue credit card, you should immediately call the bank service number and explain that it is not the case. If there is malicious arrears, please pay the arrears in a timely manner.

(2) Under normal circumstances, banks will have a 3-day grace period. Once cardholders find that their credit card is overdue, please handle it immediately to avoid leaving bad records.

2. How to deal with bad records

(1) If the cardholder has left bad records in the bank, do not rush to cancel the card after paying the outstanding balance and explaining the situation. , once the card is canceled, the personal credit record cannot be updated, and the bad record will always be recorded in the bank, causing serious consequences.

(2) The correct approach is to continue to use this credit card and maintain a good credit record for at least 2 years. It will basically not have an impact on personal mortgages, loans, credit card applications and other businesses.

This is the end of the introduction on how to calculate overdue interest on credit cards and whether overdue interest on credit cards will compound interest. Have you found the information you need?