Credit card with interest-free period: conditions of banks

The number of banks is growing every day, and they are all fighting for customers. A very convenient banking product are credit cards, and for their promotion, bankers use various advertising and marketing mechanisms. As a rule, creditors try to increase the period of free use of finance, which is usually called a grace period. Allegedly during this time, interest is not charged for using borrowed "finances", but is it really so? After all, proposals are very tempting, and in some cases the interest-free loan period can reach 200 days. What is the catch, and is it really beneficial to the man in the street?

How is the grace period calculated?

The mechanism of interest-free or concessional lending has been used for a long time and works as follows:

1. A credit card with an interest-free period opens in the selected bank or comes by mail.
2. The settlement period begins - the time for which you buy on the card; In turn, the bank controls the amount of costs and provides for this usually 30 days. Often the beginning of this period is the time of card activation (sometimes the starting point is the first operation using the card).
3. The grace period of the credit card begins, and it is also called a payment card. During this time, the debtor is obliged to return to his creditor all kindly provided funds. To avoid paying interest on the loan, it is enough just to return all the borrowed amount in a timely manner.

The period of interest-free use of bank finances is summed up from the grace period and the settlement period, so the amount is at least 50 days.

When you need to pay interest

In cases where the borrowed funds can not be repaid in full, the bank will accrue interest on the money spent for the settlement period. The end date of the grace period is the date of making the minimum payment, which is from 5 to 10 percent of the total amount of debt, plus interest for using the loan.

At the end of the first accounting period (thirty days), the second and subsequent ones will start. It will act simultaneously with the payment period. This means that, timely repaying the debt on previous purchases, it is possible to use the card to make new ones.

Specificity of calculations

The determination of the amount of accrued interest directly depends on the duration of two periods: payment and settlement. For a simpler explanation and understanding, it is better to resort to a concrete example.

Example

The beginning of the settlement period is the time when a credit card with an interest-free period in the bank or, in some cases, its activation, is received. Assuming that the activation date of the card was March 1, and 30 000 rubles were spent for the month from the card, on April 1, that is, after 30 days, will be the final of the first settlement period. The bank will sum up the results and find out how much money was spent over the past month, and will provide the client with a notice indicating the amount of debt. In the case under consideration, this will be 30,000 rubles. Information can be provided in several ways:

• Notification via SMS;
• Internet banking;
• Call to the call-center of the bank.

Then the payment period will follow. Suppose he is 20 calendar days. Thus, it turns out that it will finish on April 21. Summarizing both periods, we get 51 days, which bankers and present as a grace period of the credit card, or interest-free.

It turns out that a client who does not want to pay interest for using bank money will have to reimburse all costs until April 21. This does not mean that the entire amount must necessarily be returned at a time, you can divide it into several payments, the main thing is that by April 21, the whole amount was found on the card (in this example - 30,000 rubles).

If you need more funds

It is important to note that a credit card with an interest-free period does not prohibit further use of credit funds at a grace period. You can continue to purchase with a credit card, if, of course, the credit limit allows. If, in addition to the already borrowed funds, another 5,000 rubles were needed, and they are on the card, the client has every right to use them, just to not pay credit interest, until April 21, it will be necessary to return not 30,000 rubles, but All borrowed 35 000 rubles.

If the debt is not fully repaid, it does not matter. Simply by April 21, the client will need to deposit at least the minimum payment amount. In some cases, it varies from 5% to 10%.

For the example in question, suppose that the minimum payment is 10% of the debt amount. Thus, at the end of the grace period, a minimum of 3,000 rubles must be credited to the credit account. All information is usually contained in statements that banks try to provide to their customers in writing. They take into account transactions for the billing period, ie until April 1.

The following calculation period deserves special attention, which will last from April 1 to May 1. Until April 21, two periods intersect and, as it were, overlap each other. That is, if the debt is not paid in full until April 21, the minimum payment amount will be calculated taking into account the total debt as of May 1.

In this case, 30,000 rubles were initially spent, 10% of which was paid as a minimum payment. Then, after April 1, another 5,000 rubles were withdrawn from the card. Thus, the credit card debt for May 1 will be 32,000 rubles, and the minimum payment, therefore, is 3,200 rubles. The funds will be required until May 21.

The banking offer of loans with a long grace period of one hundred days and even more seems very attractive. The first settlement period for such cards, as in the first case, is 30 days, and the client can pay bank debt without excess interest for the next seventy days.

Calculation of interest-free period from the first purchase

This option is also possible when the settlement period does not begin from the moment of issue or activation of the card, but only from the first use. Such a credit card with an interest-free period is the most profitable for customers. This is due to the fact that after completing the card, it is not necessary to use it immediately, it can be applied when required. That is, in the presence of this banking product a person always has some kind of financial reserve. And accrual of interest is conducted without any tricks.

Suppose that the card was received through the mail on March 1, and paid for it only on March 24. Thus, adding to this date 30 days, it turns out that the end of the calculation period will be on April 23. In order to avoid paying interest, it is necessary to pay off all debt until May 13. That's when the grace period ends in 50 days.

When the payment period is strictly fixed

Engage in mathematical calculations and find out the calendar boundaries of periods (preferential, settlement) is not always convenient, therefore some banks assign specific dates for the month to determine the periods. In this case, there is no binding at the time the card is received or started using it. Often the end of the billing period becomes the first day of the month, and the end of the grace period is 20 or 25 the day after the calculated month.

Example

For example, it looks like this: the credit card received on March 1, the settlement period will end on April 1, regardless of which day of the month the card was used. And the repayment of the entire amount of debt or at least making a minimum payment, the credit organization will wait until April 25.

Different conditions of banks

Even one bank can offer cards with different credit conditions. This tactic is applied by Alfa Bank, which offers its clients two types of cards:

1. A credit card with an interest-free period of 100 days, which begins with the receipt of the card and consists of a 30-day settlement period and a 70-day grace period.
2. Co-branded credit card with an interest-free credit period, opened in conjunction with large companies (for example, airlines). For this banking product, the grace period is reduced to 60 days.

For the starting point of the calculation period, the date of opening the card is taken by creditors such as Home Credit and Sberbank. The grace period of their cards is 50 days.

The Russian Standard Bank increases this period by 5 calendar days, 30 of which refer to the calculation period, and 25 to the preferential one.

Interest-free period "Tinkoff" is the same number of days, but it begins with the first purchase. But a credit card with an interest-free period "VTB 24" has a variety of options, depending on the size of the loan, but the grace period is minimal and is 50 days.

The greatest grace period

A credit card with an interest-free period of 200 days is extremely rare, to date, this product is offered to its new clients by Avangard Bank. The amount on this credit card is small, but the card service is quite expensive. Yes, and use this proposal can only once.

Important points

When making a credit card, it is important to know that the grace period of most of them applies only to non-cash payments. Find a bank, whose credit products include a credit card with an interest-free period for withdrawing cash, is rather difficult. Most lenders charge an additional percentage for withdrawing cash from the ATM.

By signing the contract, the client should familiarize himself with the payment schedule and a number of mandatory bank commissions that will be accurately written off the card and will be added to the total debt. As a rule, this is a service charge for the card, sms-service, insurance.

It is necessary to check which date the bank will consider the time of receipt of funds. Not the fact that it will coincide with the number of the month when the money was paid. Usually, this is the time of receipt of funds to the account, the difference between the dates can reach 3 days even within one credit institution. Not to mention postal transfers and other payment systems.

When deciding to open a credit card, you need to consider the purpose of its application, from what point is considered an interest-free period. It will also be necessary to thoroughly familiarize yourself with the conditions of banks that may differ materially. There is no need to rush to the first suggestion, it is better to weigh all the pros and cons in advance.