What does the minimum payment amount on a credit card mean? Will there be automatic deductions after paying the minimum payment?

What does the minimum payment amount on a credit card mean? After paying the minimum payment Will there be automatic deductions in the future?

Friends who use credit cards know that credit cards have three repayment methods: full repayment, installment repayment and minimum repayment. Among them, the minimum repayment of credit card , some cardholders still don’t know much about it, so what does the minimum repayment amount of a credit card mean? Will the amount be automatically deducted after paying the minimum repayment amount?

The minimum repayment amount of a credit card is a repayment method provided by banks to credit card users. When the cardholder cannot repay the debt within the specified repayment period, the credit card user can apply for installment In addition to repayment business, you can also repay the minimum repayment amount of your credit card.

Generally, the minimum repayment amount of a credit card is 10% of the total bill. For example, if the repayment amount for the current period is 5,000 yuan, then the minimum repayment amount is 500 yuan. As long as the credit card user repays the minimum amount before the final payment date, If you repay the amount, the bank will not count the cardholder as overdue, and there will be no bad record on personal credit.

As long as the credit card user repays the minimum repayment amount, the bank will not continue to deduct the money later. However, the user who chooses the minimum repayment method will not be able to enjoy the interest-free period, starting from the consumption date of each bill. , the bank will calculate monthly compound interest based on a daily interest rate of 0.05%. The longer the period, the more interest charges will be incurred.

So if it takes a long time to pay off the credit card balance, it is not recommended that you choose the minimum payment method to repay the credit card to avoid incurring more interest.

When necessary, credit card users choose the minimum repayment method to repay their credit cards to avoid overdue payments, which will affect personal credit, but it is not recommended that you use the minimum repayment frequently.

If you often use the minimum repayment amount, the monthly repayment amount is small, which can easily lead to misunderstandings for cardholders and lead to bad consumption habits.

And frequent use of the minimum repayment amount will make the bank feel that there is a problem with the user's repayment ability. In order to control risks, the bank is likely to reduce the user's credit card limit.

What will happen if you only pay the minimum payment on a credit card?

If you only pay the minimum payment on a credit card, it will not cause overdue payment, but the customer will no longer be able to enjoy the interest-free period, and the remaining balance will not be paid. Part of it will be fully included in the minimum payment amount of the next bill, and the bill will accrue recurring interest.

The main consequences of paying only the minimum repayment amount on a credit card are: customers can no longer enjoy the interest-free period, and recurring interest will accrue on the bill. First of all, all consumption recorded on the bill will be charged at a daily interest rate of 0.5% from the day it is entered into the account until the day before the repayment date. The remaining unpaid portion of the bill will also be charged at a daily rate of 0.000% from the repayment date. Interest will be accrued at a daily rate of five, which will be recorded until the customer repays it in full, and compound interest will be accrued on a monthly basis.

As a result, the customer will have to repay more money to the bank, and the remaining unpaid amount will be included in the minimum payment amount of the next bill, which needs to be paid on the due date of the next bill ( Paying off the loan in full before the date of payment will also increase the customer’s subsequent repayment pressure. If the customer fails to pay off all the remaining balance after the minimum payment of the current period's bill when repaying the next period's bill, it is equivalent to failing to pay the minimum payment of the next period's bill, which will also cause overdue payment. , thus leaving a bad record on the credit report, causing damage to the customer's personal credit.

It is recommended that if customers do not have enough repayment ability and cannot obtain sufficient funds to repay their credit card in the short term, in addition to the minimum repayment, they can also choose to repay in installments. After applying for installment, the installment part can be repaid in installments starting from the next month (the uninstalled part still needs to be repaid this month). Installment repayment will not accrue interest, but a certain installment fee will be charged.

Credit card limit, also known as credit card available limit, refers to the maximum amount that can be used by your credit card. It includes credit limit (that is, the maximum overdraft limit of a credit card) and the amount deposited into the credit card. .

The limit of any credit card depends on the effective income and asset security value provided by the individual during the application process. The credit limit of a credit card is positively correlated with the applicant's income and secured assets, that is, the higher the income and secured assets, the higher the credit limit obtained. Therefore, applicants must provide proof of income, provident fund social security, and asset guarantee statements.

Asset guarantees include fixed assets such as real estate and cars, as well as current assets such as savings and bonds.

What to do with the remaining amount after paying off the minimum payment on a credit card?

After paying off the minimum payment on a credit card, the remaining amount only needs to be paid off before the next payment date, and there will be no excess. Penalty interest will be charged on the amount placed and will be included in the next statement.

The interest of 0.5% per day will be calculated until the statement date of the next month. Therefore, it is best to pay off the bill at once to enjoy interest-free. If you use the minimum repayment method, not only will you have to pay back the amount that should be paid, but you will also have to pay penalty interest.

Credit card bill installment payment is one type of credit card installment payment. This type of installment payment means that the credit card holder requests the credit card center to return the consumption amount to the bank in installments after using the credit card to swipe the card.

Credit card bill installment payment is the simplest method of installment payment. You only need to call the bank's credit card center or log in to personal online banking to apply between the time the card payment is credited and the due date of repayment. You can pay in installments, and generally you can get approval as long as you have no bad personal credit history.

The minimum repayment amount is the minimum amount that needs to be repaid in the current month when using revolving credit. The minimum repayment amount is listed on the current bill. The minimum repayment amount for each period of bill is calculated as follows: Minimum repayment amount = 10% of all general transactions on the credit card account + 100% of the single-period amount of all outstanding installment transactions in the account + 100% of the unpaid portion of the minimum repayment amount of the previous period +100% of all funds used in excess of the account credit limit +100% of fees +100% of interest.

Bill installments can generally be applied for by calling the customer service center or telephone banking of the card-issuing bank. ICBC cardholders can apply for installment payment at any ICBC branch, ICBC online banking, telephone banking and mobile banking. China Merchants Bank can apply for installment payment at Apply for the bank's online banking. Relevant personnel from China Construction Bank reminded cardholders that although various banks have launched bill installment payments, it does not mean that every cardholder can pay in installments through credit cards.

Banks generally evaluate the credit status of cardholders based on their credit limit, credit history of cardholder purchases, etc. Only when the assessment is passed can the cardholder successfully make installment payments; if the assessment result is not satisfactory, the bank may reject the cardholder's installment application, or may not be able to grant the cardholder the installment payment amount he wants. Cardholders can apply for installment by phone after fully considering their own financial situation.

The minimum consumption amount applied for installment by various banks is basically between 500 and 1,500 yuan, including 600 yuan for ICBC, 1,000 yuan for China Construction Bank, Bank of China, and China Merchants Bank, and 1,500 yuan for Bank of Communications (Y-power card) (single transaction amount is 500 yuan), CITIC is 1,200 yuan, while Agricultural Bank of China and China Guangfa Bank stipulate that single transaction amount of 500 yuan or more can apply for installment. Everbright Bank has no requirement on the amount. As long as the cardholder uses the designated card, the bill will be automatically divided into 12 installments.

That’s it for the introduction of paying the minimum payment on a credit card.