Credit card is a convenient payment instrument. Before opening one, you should have a look at its conditions, regulations and especially, how to calculate late interest rate.

1. Conditions for opening credit cards

General conditions

• - Vietnamese citizens of 15 years old or older.
• - Foreigners whose remaining residency in Vietnam is at least 90 days from the application date for card issuance, and whose valid residency in Vietnam is at least 12 months.
• - Having no Group 2 debts, bad debts, and debts sold to VAMC.

Financial capacity conditions

• - For unsecured credit cards: Average monthly income is at least VND 4 million.
• - For secured credit cards: Card holder’s savings passbooks, real estates, and other assets can be used as collateral.

2. What documents to prepare?

• - Identification documents, which include ID card/Citizenship card/Passport and Household registration book/KT3/Temporary residence certificate/ Evidence of residency and remaining residency (for foreigners)
• - Documents proving financial capacity, which include Labor contract/Recruitment decision/Appointment decision and Payroll account statement/Income certification, etc.
• - Collateral documents (in case of secured credit cards): Documents proving legal ownership of collateral

3. Credit cards can be issued without collateral, with collateral or a combination of both.

To use credit card appropriately and take full advantage of its benefits, please keep the following in mind:

4. How is interest rate applied?

• - Statement period: within 1 month, starting on the 20th or the 25th of every month
• - Closing balance is the total transaction amount in the period, fees and potentially interest of the previous statement period when cardholder fails to make full and timely payment.
• - Minimum payment amount is the required amount to be paid each statement period in order not to affect cardholder's credit history, as well as to avoid any late penalties. The minimum payment amount ranges between 3%-5% of the monthly closing balance.
• - Payment due date is the last day cardholder is exempted from interest for the spending amount incurred during the period. In case total spending amount cannot be fully paid, cardholder needs to pay the minimum payment amount to avoid any late penalties.
• - Credit card interest (in case cardholder fails to make full payment of the closing balance on the payment due date) shall be calculated based on the closing balance in accordance with the following formula: Closing balance x annual interest rate/365 x time (actual number of days).

For cash withdrawal or equivalent transactions (money transfer, traveler's checks purchase, prepaid card purchase, etc.): Interest is calculated immediately at the end of transaction day in addition to cash withdrawal fee.

For payment for goods and services:

• - If closing balance is fully paid on or before the payment due date (with detailed notification from the bank): No interest or fee shall be charged (maximum interest free period up to 45 days).
• - If payment amount is equal to or higher than the minimum payment amount of the statement period: An interest following the credit card interest rate shall be charged for all transactions in the period from the transaction date to the payment date.
• - If payment amount is less than the minimum payment amount of the statement period: A late penalty and interest shall be charged for all transactions in the period from the transaction date to the payment date.

Example:

You are a BIDV international credit cardholder, making payment transaction for goods and services with the following details:

On 24 May 2019: transaction amount: VND 3,000,000 (1)

On 17 June 2019: transaction amount: VND 7,000,000 (2)

On 25 June 2019: transaction amount: VND 2,000,000 (3)

Statement date: 20

Statement period: 21 May - 20 June 2019

Interest rate (%/year): 16%/year

Late penalty: 4% of overdue amount

Minimum payment amount: 5% of outstanding balance at end of statement period

Payment due date: 5 July 2019

=> Closing balance: VND 10,000,000 (Transaction (1) + (2))

Transaction (3) is included in the statement period from 21 June to 20 July 2019

If you make the full payment for the closing balance on 5 July 2019, the paid amount shall be VND 10,000,000

In case you pay VND 400,000 (this amount shall be deducted from the balance on the prior dates of transactions in the period) on 5 July 2019.

Then on 9 July 2019, you make full payment of your card balance, the paid amount shall be:

closing balance (10,000,000 - 400,000) + late penalty + interest ( 3,000,000*16%/365*42 + (3,000,000 - 400,000)*16%/365*4  + 7,000,000*16%/365*22)

In case you pay VND 1,000,000 (this amount shall be deducted from the balance on the prior date of transactions in the period) on 5 July 2019.

Then on 9 July 2019, you make full payment of your card balance, the paid amount shall be:

closing balance (10,000,000 - 1,000,000) + interest 3,000,000*16%/365*42 + (3,000,000 – 1,000,000)*16%/365*4  + 7,000,000*16%/365*22

5. Payment channels for outstanding balance:

• - At BIDV's counter: cash, payment order
• - On BIDV Smartbanking
• - Automatic payment: Customers sign up for a current account to make automatic debit.
• - Transfer from other banks

Remarks:

• - Customers should follow up the bank's monthly notices (statements, SMS ...) to make full payment of outstanding balance before the payment due date
• - Cash loan withdrawn from your credit card should be paid as early as possible
• - If you cannot pay the full balance, you should make a payment amount equal to or higher than the minimum payment amount as soon as possible.