7 things to know about exam evening payment credit card fraud

1. What is the credit card minimum payment?

Credit card minimum payment is the minimum amount you must pay to the bank each period (usually 1 month) to avoid being charged a penalty fee or being listed as a bad debt. In other words, this is the lowest payment the bank will accept to keep your credit card account active.

When making the minimum payment on a credit card, the remaining balance that has not been paid in full will be charged an interest rate of 20 - 40%... depending on the bank. However, you can still use your credit card and there are no late fees. In particular, your credit score is still maintained well to avoid being put on the "black list" and it will be difficult to approve a loan later. 

2. How to calculate the minimum outstanding balance that needs to be paid

Normally, the minimum payment ratio of most banks today will be about 5% of outstanding debt. However, the specific calculation of this amount may vary depending on each bank and card type. Below are the 3 most common ways to calculate minimum payments:

Method 1: The minimum payout is calculated as:

In there:

• 5% x Outstanding debt: This is the most basic part, you will take 5% of the total amount you owe on the card (debt balance).
• New interest rate: Is the amount of interest arising in  payment period.
• Late payment fee: If you were late on payments in a previous period, you will have to pay an additional penalty fee.

For example: Suppose your outstanding loan balance is 10,000,000 VND, the new interest rate is 200,000 VND and you have a late payment fee of 100,000 VND. Then, the minimum payout is:

Minimum payment = (5% x 10,000,000) + 200,000 + 100,000 = 800,000 VND.

Method 2: The minimum payment is calculated as 5% of the entire balance.
This method is simpler, the minimum payment amount is calculated as follows:

For example: With a loan balance of 10,000,000 VND, the minimum payment will be: 5% x 10,000,000 = 500,000 VND.

Method 3: The minimum payout is calculated as:

This calculation method applies to customers who use credit cards to pay in installments during the period. If you are paying for a card purchase in installments, the minimum payment will include the monthly installment.

For example: GSuppose your outstanding debt is 8,000,000 VND and you are paying for a phone in installments with a monthly payment of 500,000 VND. Minimum payment = (5% x 8,000,000) + 500,000 = 900,000 VND.

3. Advantages - disadvantages when paying the minimum credit card payment

Paying the minimum credit card balance also has its own advantages and disadvantages. You need to understand these advantages and disadvantages to use credit cards more effectively. 

4. How to look up credit card maximum payment

To look up the correct minimum credit card balance to pay, you can apply one of the following methods: 

• Based on the bank statement sent: At the end of the financial period (usually 1 month), the bank will send the customer a statement, summarizing all the transactions you have made with your credit card during the period. There will be information about the minimum balance that needs to be paid so customers can clearly understand. 
• Call the bank's Hotline: You can call the hotline number of the card-issuing bank and provide the necessary information to receive specific answers from the staff and notification of the minimum balance to be paid. 

5. How to pay the minimum outstanding balance to the bank

There are many ways to pay the minimum credit card balance. Each method has its advantages and is suitable for different customers.

• Pay at transaction counters: Customers go directly to the card-issuing bank's transaction counter to pay the outstanding balance and receive detailed instructions from staff. This form is simple and easy to do but requires you to spend time moving, queuing and waiting. 
• Payment through transactions on Mobile Banking: This is a convenient, fast form of payment that can be made anytime, anywhere with a smartphone with an internet connection and the Mobile Banking application installed. 
• Pay through the automatic credit card feature: You just need to register with the bank to automatically pay the outstanding balance, when the system is due, the system will automatically withdraw money from your account to pay. The condition is that the balance in the account must be sufficient to pay the outstanding debt. 
• Payment via e-wallets (Momo, ZaloPay, VNPay...): Payment via e-wallet is very convenient, fast and you can also receive many attractive incentives. The limitation of this method is that transaction fees may be higher than other forms and not all banks support payment via e-wallets.
• Pay at transaction counters from other banks: If you cannot go to the card-issuing bank's transaction counter, you can pay at another bank closer. However, this method may incur interbank transfer fees and more complicated payment procedures.
• Pay at ATMs: Paying outstanding debt at an ATM is chosen by many people because it is quick and easy to operate with a few basic steps. However, this form requires you to go to the nearest ATM, which may not be convenient in some cases. 
• Payment via Electronic Banking at website: This form is similar to paying via Mobile Banking, but instead of using the application, you perform operations directly on the bank website through a web browser. This method can be used on both computers and phones with an internet connection.

6. Some notes when paying the minimum credit card balance

When paying the minimum credit card balance, you need to keep in mind the following issues: 

• You should not pay the minimum balance continuously: Paying the minimum debt balance for many months causes the debt balance to decrease very slowly or not at all, showing that you have difficulty controlling your finances. This can cause the bank to evaluate you as a high credit risk, lowering your credit score.
• You should pay off your credit balance in full: Paying your outstanding balance in full helps you avoid interest and penalty fees. At the same time, credit scores improve, creating favorable conditions for future loans.
• When payment is due, avoid forgetting: Forgetting to pay on time leads to penalty interest and late fees, increasing your financial burden and lowering your credit score. Remember the payment schedule to avoid unnecessary fees.
• Should spend reasonably to ensure solvency: Make a clear spending plan to control credit card usage. This helps you maintain solvency and avoid falling into credit card debt.

7. Answers to some common questions about credit card minimum payments

Paying the minimum credit card balance is still a lot of questions. Here are answers to common customer questions: 

Question 1: Is it possible to pay more than the minimum loan balance?

Customers can absolutely pay more than the minimum outstanding balance. Paying more reduces the amount of interest paid, as interest rates of up to 20 - 40% will be applied to the outstanding balance. To avoid interest and penalty fees, it is best to pay your credit card balance in full and on time.

Question 2: Paying the minimum outstanding balance or paying the entire outstanding balance, which method is more beneficial?

Paying off the entire outstanding balance is the best option if you have enough financial capacity, helping you not to incur any interest or penalty fees and still maintain the use of your credit card. If you cannot afford it, paying the minimum outstanding balance is a temporary solution. However, this form should not be maintained long term because financial pressure will increase, leading to the risk of insolvency.

Question 3: What is the solution if you cannot pay the minimum credit card balance?

If you cannot make the minimum payment, you should proactively contact your bank for support. Some banks have programs to support customers experiencing financial difficulties. In addition, you can consider borrowing from relatives to solve short-term financial shortages.

Above are SeABank's shares about Minimum credit card payment. Hope this has helped you understand clearly how to pay off your credit card balance. This is the appropriate solution when your card debt is due and you have financial difficulties. However, this is only a temporary solution and you should balance your finances to pay off the outstanding debt on time. 

If you want to learn more about credit card products and how to use credit cards effectively, please contact SeAbank via Hotline 1900 555 587 or visit the website www.seabank.com.vn for more detailed information.