A variety of plastic cards of variousbanking organizations is huge. Among them there are debit, credit, overdraft card. The advantages and disadvantages of each type are different. In many ways, they are united by the fact that each of the cards has annual maintenance, which, depending on the conditions, can amount to different amounts. Basic information about each plastic card below.
Types of plastic cards
Кредитная карта оформляется в отделении одного из banks when the borrower confirms his financial capabilities in order to repay the used funds of the credit institution. The terms of use of credit funds differ in interest rates, the availability and duration of the grace period and other factors in accordance with the conditions and rates of the selected bank.
What are overdraft cards?
Overdraft card is so called thanks tocombining the two previous types of plastic cards. The main feature is that it is available for registration only if there are transfers to it of your salary. At first, expenses are written off at the expense of own funds on the card, and only in cases when the amount on the account is insufficient for payment, is overdraft used. What are overdraft cards? In essence, an overdraft is a short-term loan. Short-term overdraft is called because the repayment occurs on the next month when payroll.
Overdraft history
Initially, Russian banks provided a service.overdraft only to legal entities. Companies in the event of a situation where their accounts were empty, could use the bank’s funds to pay their obligations to other legal entities. At the time of receipt of funds on the company's settlement account, the bank wrote off a part of them to repay the resulting debt, while the remaining funds remained in the account.
In the future, the service received its development inthe sphere of private services and began to be called "overdraft for individuals." The scheme of provision and use of borrowed funds is identical to the scheme of service companies. Simplified bank overdraft can be described as follows.
Lack of finance when paying → Use of overdraft and payment for goods / services → Cancellation from the transferred funds to the current account by the employer
Sberbank card with overdraft functionality
What is overdraft cards, you read above.Sberbank is the most common and reliable bank in Russia, so many people are wondering what an overdraft card of Sberbank of Russia is. Let's start in order.
What is an overdraft card of Sberbank of Russia? This is a salary card of an individual with connected overdraft functionality (short-term borrowing of bank money).
Sberbank's overdraft card is issued when contacting a bank branch and providing a package of documents (if you are currently receiving salary through third-party banks).
- Application for this service.
- Your passport.
- A copy of the employment record certified by the employer.
- Certificate of income or an extract from the personal account in another bank.
If your company is already serviced by Sberbank,and the card is in your hands, then connecting services will be much easier. Contact a bank branch with a passport and a card, and any Sberbank employee will be able to connect such functionality.
Overdraft Card Terms
As with any banking service, a card withoverdraft functionality is provided under certain conditions. In the case of using borrowed funds, the bank charges interest on the overdraft amount. At Sberbank, the interest rate is 18% per year. The rate is small at first glance. However, there is important information that the client must take into account.
- Exceeding the limit is fraught with an increase in the interest rate to 36% per year.
- Terms of cancellation of funds are limited in time and are 1 month. It is assumed initially for this type of card that cash flow in your name occurs at least once a month.
- Overdraft does not provide for a grace period (when interest for use is not charged).
Overdraft card of Sberbank. How to find out the limit?
What are overdraft cards of Sberbank of Russia, youyou know And how to find out the limit? The bank calculates the overdraft limit individually for each client. The overdraft amount, according to the rules of the bank, for individuals is not more than 50% of monthly income. For legal entities, it is calculated on the basis of the average value of profits for the last months (half a year). The overdraft amount will be 40% of this value.
Also, the card limit can be found through the service.Sberbank Online. In your personal account you will see information about the size of overdraft, debt and you will be able to estimate your expenses thanks to a bank statement.
Overdraft and loans
If you compare the conditions for obtaining consumera loan and an overdraft on a payroll card, the first option will be more profitable for the borrower. Interest rates and the loan amount are more profitable, especially if you plan to purchase expensive equipment or goods whose value exceeds the overdraft limit.
Credit cards can also be viewed as more profitable than overdraft, especially if the cancellation occurs during the grace period. Since the bank does not charge interest in this case.
Overdraft terms
The person who applied to the bank for overdraft must meet certain requirements of the credit institution.
- Continuous work experience must be at least 6 months at the last place of work, and at the time of applying the individual must be in an employment relationship with the employer.
- You should not have a loan debt inthis moment. More willingly, the bank will provide overdraft to customers with a positive credit history. This requirement is left to the discretion of the bank in accordance with the internal documents on servicing individuals.
- The bank may make registration requirements. For example, it will provide an overdraft to a client who has applied to a bank branch in the region of his residence.
- Other requirements concerning the income of individuals and organizations.
Disadvantages of overdraft cards
In case a significant part was usedan overdraft limit, the salary received on your account may not be enough to fully pay it off. And the terms of payment of debt on an overdraft card are very tight, 1 month. Therefore, you will have to either greatly save the whole next month, or to report money yourself from other sources. This is extremely uncomfortable. After all, if you don’t do that, then the overdraft will not close, and the accrued interest will already be 36% for the remainder of the debt. That is, you significantly overpay in the end.
За пользование услугой овердрафта нужно платить, as for the maintenance of your account. The overdraft amount is debited from the card automatically once a year. Fines and penalties for late payment are collected from the client, not from the accounts of the organization, which did not transfer your salary in time.
The advantages of overdraft cards
What are overdraft cards and what are theirbenefits, read on. The main advantage it can be called the requirements for its receipt. Especially if you are already a member of the Sberbank salary project. The card with overdraft limit is usually issued for payment systems VISA and MasterCard not lower than the standard level (the so-called social cards do not provide for the presence and connection of overdraft).
Timely payment of overdraft debtand the transfer of funds on time to your bank account is a guarantee of your peace of mind. In this case, there will be no overpayment for the provision of a short-term loan, and the overdraft will be closed (reset). Further use continues with standard parameters: 18% per annum and 1 month for payment.
Tips for overdraft card holders
There are several ways to find out about the availability of services on your card:
- when contacting the accounting department of the employing organization;
- in your account on the site of the bank.
To avoid additional costs associatedwith payment of accrued interest, fines or penalties, you must constantly monitor your debit account. Some terminals (ATMs) can show the total amount of available funds, including overdraft and accrued salary.
Cash withdrawal or payment transactionsIt is better to produce goods / services on the day after the accruals, since it is not always cash — accrued wages — that arrive quickly in the account. There may be technical problems, and write-off will occur due to overdraft, since its amount is always at your disposal.
