Currently, one of the main tools for the interbank competition is credit card issuance. Now the basis for the successful and profitable activities of each financial institution is creating just the mass attraction of new customers. Hence the direct influence - more customers, which means a higher rating of the company, a “weightier" consumer lending portfolio, and, consequently, the introduction of additional options for interbank lending.
For this reason, those who create banking products that are part of the physical sphere must solve two problems at once - the goods produced must be profitable both for the credit company itself and for consumers. At the same time, everyone knows that usually these concepts, in reality, turn out to be incompatible. And potential borrowers should be aware that companies are meaningless to work for free, and, therefore, such attractive interest-free loans are only cheese in a mousetrap.
Concessional lending - the first trap
So the grace period, beloved by all credit card holders, is actually a standard marketing technique used in advertising a product. In this case, financial goods are no exception. So now you can hardly find a loan agreement for a bank credit card, which would not include a provision on a grace period. And if you carefully read the loan agreement, then you will definitely find the point that the free grace period necessarily compensated by the extra, mandatory, albeit small monthly installment, which the financial institution will take for the fact that it serves your card. In reality, everything happens like this: you issued a credit card, left it “just in case”, and after some time you see that the bank owes a pretty good amount of money - your installment turned into a delay, the penalty for the delay was transferred, and you ended up the blacklisted bank. Another subtlety that should not be forgotten by fans of the grace period - this benefit applies only to pay for services or products that you make with a credit card. If you decide to simply withdraw money from the card, the bank will charge a fee for using the money based on the period of use, without looking at the benefits.
Bank credit cards and your unexpected delay
When using a credit card, a delay may sometimes appear that you did not even know about. This phenomenon, which is called an “unauthorized overdraft,” is very common if you use a credit card abroad or simply cash out funds at a non-native ATM. The reason for this phenomenon is a specific delay in the activity of the server of the institution, which sends certain operations you have completed. This means that information about the balance on your card is not sent right away, and during this period you can very well buy something else (or withdraw funds) and exceed the money if their money wants to transfer one bank to another bank account that very useful technique is routing hats the American use PNC Routing Number limit prescribed on your credit card. This might not have been noticed if it were not for the fact that interest accrual for excess cash significantly exceeds the interest rate specified in your loan agreement. The “illegal method” used by some firms is a fine charged for … that the client does not use credit money. In other words, if you have a credit card, but you do not use it, you are one way or another the company’s fines. Another possibility for arrears is the fee for using mobile banking. The amount, of course, is small, but it is also a negative indicator, that is, with a minus sign. And, despite the fact that not all banks use these methods, you need to remember this probability, since the first delay in money, even 10 dollars, which you didn’t ask about in time, can increase to hundreds, or even thousands, which you should list. There is only one prevention of such cases - very carefully analyze the agreement on bank credit cards before signing, and if you are in any doubt, just contact another institution.