Credit account: definition, meaning, how to open or close a credit account

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Credit account - a specific bank account on which funds received on a loan are placed. Tracking operations on the account and accruing interest and pen alties on the account is carried out by the bank using a certain combination of numbers.

On a regular account, you can accumulate financial resources, form deposits or keep savings. Credit is a "stash" for unforeseen situations, allowing you to withdraw the necessary amount of money at any time.

Definition

A feature of a credit card account is that the accrual of interest begins only after the funds are withdrawn from it. For this reason, it is often opened for the future, especially if a certain amount may be needed soon. There is a nominal service charge.

A credit account is opened for any loan:

• Credit lines that allow you to use funds in several stages.
• Credit cards. You can withdraw money from them at any ATM from your owncredit account. They are issued for almost every person, but on different conditions.
• Regular loans. Issued at a time and paid every month. The bank strictly monitors all annuity payments.

Bank credit accounts

Opening an account with a banking organization is carried out in order to provide a credit person with the possibility of issuing a loan and repaying borrowed funds. The client deposits money into a separate account as they are returned.

The purpose of a credit account is a reflection in the bank's balance sheet of transactions that are aimed at the formation and repayment of a loan in accordance with the conditions reflected in the loan agreement. Such accounts may also be referred to as loan accounts.

Main types of accounts

According to the form of issuing loans and the method of managing an account, there are several types of credit accounts:

• Simple. The amount placed on it is issued one-time as a loan. The loan is extinguished by crediting money to the same account.
• Credit line. The amount is credited to the bank account in parts, if necessary, according to the established limit.
• Overdraft. A special cash reserve is linked to the client's current or settlement account. It is used in situations where the available own funds are not enough to conduct a transaction.

Opening conditions

Opening a credit bank account is quite easy: for example, to open a credit account inSberbank requires the client to reach the age of majority. The only limitation is the terms of payments and interest rates: the less confidence in the client, the stricter the requirements for registration.

Many credit institutions send credit cards to prospective customers, upon receipt of which only the finalization of the credit card account is required. Sberbank, for example, often resorts to such tactics, but it has a drawback - too high an interest rate. The maximum amount is limited, so it will not be enough for a large purchase.

To invest money, purchase valuable coins or bills, only a passport is required. To open a credit account, you need to collect a package of documents and resort to the help of guarantors or arrange a pledge if necessary.

Mandatory documents on the list are income statement, employment contract or work book and passport. When opening a credit account, a credit history is checked: if there are precedents in the past, a refusal will be given regardless of the amount of salary and the quality of the documents provided.

Closing account

Closing an account with a credit institution may be required if we are talking about a credit line or a card that has been working for a long time. A classic loan closes automatically - the borrower only needs to control this process.

In the case of a credit card, it may expire, break or be lost, but the listedsituations do not mean closure and termination of obligations on the part of the client.

You can close a credit account by contacting a banking organization and making an application. The procedure usually takes several months.

Types of loan accounts

In banking practice, the following categories of loan accounts are common, in addition to those listed above:

• Simple. The bank opens it once. A distinctive feature is that the debit amount on it is determined once and is subject to further full repayment by the client.
• Special. Funds are credited to it both for repayment and for increasing the debit amount. In most cases, it is provided through a line of credit.
• Overdraft. Loan accounts of this type are opened by a bank without drawing up a special loan agreement in situations where a credit institution allows its client to overspending, but requires mandatory repayment.
• Contractor. A credit account plan that combines checking and loan accounts. In this case, all movements of funds are taken into account jointly, and the state of the client's debt to the bank is reflected on the account.
• Special. A loan account that records transactions with bills of exchange. An organization can open only one such account.

All credit accounts can be divided by type of currency into ruble and foreign currency. The most difficult to maintain and understand is the checking account, which combines a loan and current account.

Number

Bank loans are regulated by general provisions, respectively, the contract numbers meet accepted standards. In loan agreements, as a rule, there is no loan account - its place is taken by a deposit account on demand. Such nuances simplify the work of the accounting department and financial organizations that issued the loan and are responsible for it. The loan account number is represented by 20 digits and is compiled according to the same principle for all banking organizations.

Account Management

Amounts and operations are displayed in two sections:

• Debit - debts and loans.
• Credit - monthly repayment of a loan in amounts of a fixed amount, unless otherwise specified in the agreement.

Complete debt information is provided to the client through daily credit account updates. This allows the bank to keep reliable financial statements.

Account Maintenance Fee

Account maintenance fee is provided for legal entities only. For individuals, the bank's work with such data is carried out free of charge, since it is a product accompanying the issuance of a loan.

Credit institutions cannot charge a fee for opening and maintaining an account for an individual.

Commission refund

Illegal withdrawal of funds from the account implies their legal return. In order for the state to be on the side of the private person in the process of resolving the dispute, it is necessary to follow the exact plan:

• Creditaccounts accompanied by the payment of a commission for opening and maintaining them are a violation of the law, respectively, a formal request for reimbursement of illegally taken funds should be sent to the credit institution.
• If a credit institution refuses to return the amount, then the person has every right to go to court or Rospotrebnadzor.

Banks can bypass the decision of the arbitration court in a legal way: for example, some financial and credit organizations cancel fees for opening and maintaining accounts, introducing instead other mandatory payments for granting or servicing a loan. They are identical in amount and divided into months.

Credit card loan accounts may also be subject to a fee - they are not subject to court rulings as card maintenance is combined with account maintenance and is subject to a shared fee.

A credit account is ultimately a banking measure aimed at monitoring and tracking the status of accounts of clients of a credit institution. It is useful for the recipient of the loan to be able to use it, however, when registering papers at the bank, it is necessary to pay attention to the details specified in the agreement.