What is credit card maturity? Benefits and risks you need to know

1. What is credit card maturity?

A credit card is a type of card that allows users to advance money for use and then pay later. When the last day of the payment period arrives, if you have not paid the full amount, you will be subject to penalty interest and other fees. To avoid this situation, many people choose maturity service.

Credit card maturity is a form of quick loan to pay credit card balance when due. Instead of you making the payment yourself, another financial institution will advance the money to you. However, you will have to pay interest and service fees on this loan.

2. Potential benefits and risks when using credit card services

Credit card maturity is a matter of a financial company Advance an amount of money to help you pay off your credit card balance when it is due. This service brings cardholders benefits and also certain risks. 

2.1. Benefits when using credit card maturity service

Maturity service is an urgent solution to help resolve credit card due debt. Therefore, credit card maturity service brings the following benefits: 

• Guaranteed ability to pay, no penalty fees: When you don't have enough money to pay off the entire credit card balance on time, the maturity service will help you repay the debt, avoiding penalty interest and late fees.
• Does not affect personal reputation: Paying on time thanks to the maturity service helps you maintain a good credit score, which is beneficial for future financial transactions such as loans.

2.2. Potential risks when using credit card maturity services

Besides the benefits, credit card maturity service also has many potential risks such as: 

• Personal information may be exposed: To use the maturity service, you are usually required to provide personal information and credit card information. This poses a potential risk of being taken advantage of by thieves to conduct illegal transactions.
• The card may be blocked by the bank: If the bank detects signs of abusing the maturity service, they can block your credit card.

Thus, credit card maturity service can be a temporary solution in emergency cases. However, this is not a long-term or sustainable solution. You should only pay dues when absolutely necessary and should not consider this a financial solution to repay credit card debt.

3. Credit card maturity process

The credit card maturity process includes 4 steps as follows: 

• Service contact: The cardholder contacts the service company and provides credit card information such as card number, outstanding balance and loan amount.
• Consider loan conditions: The service company checks the credit history, income, and payment ability of the cardholder before deciding on a loan.
• Money transfer and payment: If approved, the company transfers the loan amount to the cardholder's bank account. The bank automatically deducts that amount to complete payment of the outstanding debt.
• Recovery and charging: After the bank re-issues the credit limit, the service company requires the cardholder to swipe the card through the POS machine to collect the advance amount and service fee.

So, The credit card maturity process is completed and the credit card balance will be paid in a "virtual" transaction, no goods are purchased or sold.

4. Credit card maturity fee

The company provides maturity services to help cardholders pay off credit card debt, avoid penalties for overdue debt and maintain a good credit history. To use this service, cardholders need to pay a fee called a credit card maturity fee, usually ranging from 1.6% to 4% depending on the company and time.

For example: If the outstanding debt to be paid is 50,000,000 VND and the maturity fee is 3%, you will have to pay a fee to the service company: 50,000,000 x 3% = 1,500,000 VND.

5. Solution to use credit card without card maturity

Credit card maturity service has many potential risks and customers should limit the use of this financial method. To use a credit card without maturity, you should "pocket" some of the following useful solutions: 

• Manage credit card spending appropriately: Always have a specific spending plan and use credit cards for reasonable expenses, within the limit you can afford. 
• Choose the appropriate credit card type: Choose the type of card that suits your needs, for example: loyalty card, cashback card, travel card... to receive the most incentives. 
• Take advantage of card offers: Regularly monitor the bank's promotional programs to take full advantage of the card's benefits. Or use the card to pay at the bank's affiliated partners to receive incentives such as discounts, gifts...

Typically, using SeABank credit cards, customers will receive countless great incentives such as:

• Interest-free period is up to 55 days.
• First year annual fee refund for cardholders who make at least 2 successful transactions and have a total transaction of at least 500,000 VND within the first 30 days since the card was activated.
• 0% installment payment for all transactions from 3,000,000 VND or more.
• Shop freely and swipe your card to get a discount of up to 200,000 VND at Shopee, movie discounts at Lotte…

Above are SeABank's shares about credit card maturity as well as the benefits and risks of this financial solution. Therefore, customers should not abuse credit card maturity but should build themselves a secure spending and financial plan to pay credit card balance on time. 

If customers want to learn more about SeABank's programs and products and services, they can contact the nearest transaction points or call Hotline 1900 555 587 or visit the website. www.seabank.com.vn for more detailed information.