Who doesn't know about credit cards, I'm sure most people know exactly this item that is the size of an ID card.
This banking product is indeed not a complex product that can be a way out in all financial situations, but strangely people like to use it.
Some people think that credit cards are only for people who don't like using cash when making transactions.
Ironically, there is also another opinion that says that credit cards are used because the person doesn't have any money at all.
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Apart from the problem of not having money, there is actually a credit card secret that not many people know but can provide some benefits
However, on the other hand, we also need to be aware that there is a true nature of credit cards that requires us to make bill payments.
So, the benefits or losses that we experience due to using a credit card depend entirely on how we use it and the rules applied by the bank
To get benefits and avoid losses, we should first investigate the credit card secret that is rarely discussed by bank marketing.
How Banks Calculate Credit Card Interest
Before using a credit card, it's a good idea to know first, the credit card secret about how banks calculate credit card interest. The credit card interest charged by banks to their users actually follows the credit interest rate issued by Bank Indonesia.
In my observation, the average credit card interest/month moves between 2 percent and 3 percent. This interest is charged proportionally to each recorded transaction.
If there is a time difference between the transaction date and the billing date, that difference will be subject to daily interest. To avoid confusion, I will give an example as follows.
In November, we have made 2 transactions, namely on November 8 and 12 with a value of IDR 1,000,000 and IDR 500,000. On November 20, we will receive a credit card payment bill.
The bill states that on December 6, we must pay off at least 50% of the total transactions that have been made.
This means that if the total transaction is IDR 1,500,000 with an assumption of a credit card interest of 3 percent/month, then in December the amount of IDR 45,000 is not the amount of credit card interest so that the total bill becomes IDR 1,545,000.
The amount of credit card interest charged is actually much larger, calculated from the difference between the recorded transaction date and the date the bill was issued. The interest will be calculated daily, a complete explanation is in the cash withdrawal fee section.
Daily credit card interest is a secret that is rarely discussed when we first get an offer to use a credit card from bank marketing.
But don't be discouraged, for those who pay the entire credit card bill at once, the next credit card secret is how we will be free from credit card interest problems.
This interest-free period lasts 25 days, calculated after the bill is sent to the user. A question arises, if we only pay part of the credit card bill, will the interest on the remaining bill increase in the following month?
According to Bank Indonesia regulations, no bank is allowed to apply a compound interest system. If this happens, it is right to say that it is a covert extortion that must be reported to Bank Indonesia.
Requirements for Making a Credit Card
If you are determined to have your own credit card, then you must know the requirements requested by the bank. Each bank that issues credit cards has different requirements from one bank to another.
But if you pay attention, the administrative requirements between BCA, BNI, Mandiri, HSBC and Citibank are almost similar as I have summarized below:
Must be at least 21 years old 2. Show a photocopy of proof of income 3. Photocopy of NPWP 4. Photocopy of KTP 5. Print Out of credit card bills for the last 3 months for those who have had one. 6. Photocopy of savings book for the last 3 months
Type of credit card
Regarding the type of credit card to be used, it's up to you to choose which of the 4 available options.
1. Silver type
Silver credit cards are the most widely held credit cards by the general public today. This card has the smallest balance limit, ranging from 4 million to 7 million rupiah.
2. Gold type
One level above the silver credit card is the gold credit card with the characteristic gold color. This card has a credit balance limit between 10 million and 40 million rupiah.
3. Platinum type
Two levels up from the silver credit card is the platinum type. This card is very rarely owned by the public because to be able to own it, you must meet a number of fairly heavy administrative requirements. Regarding the credit balance limit of this type of platinum card, don't ask anymore, it's quite a bit between 40 million and 1 billion rupiah
4. Titanium type
One level higher than the platinum credit card is the titanium credit card. Those who are entitled to have this type of card are only people who are directly invited by the bank that issued the credit card. There is not much information that I can get regarding the credit balance limit of this card Credit
Card Fees Charged
Not only credit card interest that we must know, but there are also other credit card secrets, namely other fees that are often charged by banks to credit card users that are often kept secret.
What are these fees?
1. Annual fee
For users who are using a credit card for the first time, be prepared to pay this annual fee. This fee is only charged once when you have been using the credit card for exactly 1 year.
2. Late payment fee
From the name itself, it is clear that this fee is charged if we are late in paying the bill outside the due date. The amount is approximately 3 percent of the total bill.
3. Excess payment fee outside the limit
This fee applies if we make a payment exceeding the maximum credit card balance.
4. Conversion fee to foreign currency
This fee is specifically applicable to credit card users who make payments using foreign currency.
5. Cash withdrawal fee
One day we run out of cash and want to withdraw money using a credit card, then this cash withdrawal fee will be charged at 2 percent to 3 percent/month or an average of 24% per year. A simple example is for cash withdrawals.
(Rp 1,000,000) x (15/November-5/December) x (24% per year) : 365 = Rp 13,150 Total Cash Withdrawal Interest Rp 13,150
6. Bill printing fee
Maybe you are not satisfied with the total bill received and want to print all the transactions you have made, then be prepared to pay the bill printing fee ranging from Rp. 5,000 to Rp. 30,000
7. Clearing Fee
If you often pay your credit card bills using checks/giro, be prepared to be charged a clearing fee. The value is approximately Rp. 25,000.
Benefits of Using a Credit Card
Credit cards are already part of today's lifestyle. Because of its importance, credit cards are used in almost all payment transactions.
That besides credit cards are actually debt, that's another matter. Because at the same time there are 4 advantages to using a credit card.
1. Become a reserve fund
When we apply for a credit loan at a bank and are then approved, usually the credit value given is still very small.
The reason is because the bank adheres to the principle of prudence which does not carelessly provide credit loans in very large amounts.
However, if in the early stages we pass and routinely pay the loan quickly, then our credit card ceiling will increase.
At this point, it means that we have sufficient reserve funds to do everything we want. This advantage is certainly a golden opportunity for people who are involved in the business world.
Sufficient capital will be very helpful in business development so use credit cards carefully and carefully.
2. Facilitate payment transactions
Quite often we hear information, how easy it is for someone to break into a credit card to be used for online shopping. But can it be detrimental to the owner, of course not.
When the bill comes from the bank, we can deny it, that the transaction value that has been made is not as large as the bill submitted.
Because it is managed digitally, it is easy for the bank to track every transaction made, where it is, and how much it is worth.
This is a positive side that we can take by using a credit card. Any value of the payment transaction will always be recorded, especially if we do it online, then if we are caught in online fraud, it is easy for us to complain by showing proof of the transaction made.
3. Money Changer
At the beginning I explained that credit cards are generally used by people who do not like to transact in cash. This means that this credit card functions as a money changer.
Imagine if we intend to buy a four-wheeled vehicle that costs hundreds of millions and we take that much money with us to the vehicle showroom, and suddenly in the middle of the road we are robbed, of course a big loss that we do not expect.
But if you buy a vehicle using only a credit card, then the possibility of being robbed is very unlikely to happen.
4. Get Cashback and purchase discounts
Becoming an inseparable part of marketing today is using a cashback pattern. This pattern is applied by several companies to purchase their products
For example, when buying a 4-wheeled vehicle at a showroom, cashback will be an attractive lure for buyers. As if buyers see an angel who comes down from the sky and must be fought over.
Cashback is given at a certain value only, for example the price of a vehicle is 160 million, then the cashback given is 5 million rupiah. This means that we only need to pay 155 million rupiah, the vehicle can be taken home.
Here, if we use a credit card with a large balance when making a vehicle payment transaction, it means that we are entitled to a cashback of 5 million rupiah.
The moment of a certain product discount at a store is also a field for credit cards to show the benefits of their existence. Sometimes there are certain products that give discounts if we pay for them using a credit card. This means that there are savings when we shop at a store.
Disadvantages of Using Credit Cards
In addition to the benefits that we can take by using a credit card, on the other hand there are also secrets of credit cards concerning the losses that can be caused by using this card. What are those losses?
1. Difficulty getting out of debt
The truth of the matter is, starting if we are disciplined in paying credit card bills by only paying part of it, then in the long term our financial position is very unpleasant, it is difficult to get out of debt. Moreover, it turns out that there are so many costs that we have to bear related to credit cards.
2. Encourage lust to continue shopping
Maybe because we feel we always have cash, we will be easily tempted to always swipe our credit cards at modern shopping centers.
Especially if it has been sprinkled with discounts, I estimate it will be difficult to restrain ourselves from using a credit card.
To overcome this point, the way out is easy, use a credit card with a limit only as much as the income we can earn each month.
How to Close a Credit Card Safely
If you are bored and it crosses your mind to just close the credit card you have, then do the following four important things:
1. Make an official request (written or verbal)
This official request can be made by making an official letter to the credit card issuing bank or by visiting their office directly. When there is a customer request like that, then according to Bank Indonesia regulations, the bank may not delay and must immediately block the credit card account.
The bank is only given 3 days to complete all the processes for requesting to close the customer's credit card, calculated from the time the customer's request is received.
2. Must pay off all bills
When you are going to submit a request to close a credit card, make sure you have paid all the bills in full, otherwise a fine will be imposed.
The remaining balance on the credit card when closing it becomes the customer's right which must be returned by the bank by transferring it to the account. During this closing process, there are no fees at all that must be paid by the customer.
3. Pay off the Annual Bill
Bill payments are always made every year for credit card holders. So if you close your credit card in the middle of the year, this annual bill must also be paid.
Conclusion
Using a credit card is an option, if we do a lot of business transactions then there is nothing wrong with using this banking product.
In addition to not being limited by space and time when making transactions, another advantage is that it is a security tool for ourselves from the threat of criminals.
However, if we are not disciplined in using a credit card, instead of getting an advantage, we will get a loss.
Even if we have to use a credit card, it is better to pay the bill at once according to the amount of the bill so that it is free from interest.
Even when closing a credit card, it can be said that it is not complicated and easy and free. So who is afraid to use a credit card.
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